Diving Into More Law School Employment Data From The WSJ

After my recent critique of the Wall Street Journal Law Blog's coverage of law school employment data, I received a nice note from Joe Palazzolo - one of the post's co-authors.  He shared with me a bit more data they'd found, further parsing the US New Top 50.  Pulling apart that data helps show even better how problematic  it is to conflate US News Schools into Top 50, or even Top 25.  Here is the data Joe shared with me, based on their assessment.

Percentage Long-Term Full-time JD required in Top 10  89%
Percentage LTFT JD required in Top 25                                  83%
Percentage LTFT JD required in Top 50                                 75%

But let's dig a bit deeper.  The median percentage LTFT JD required in US News 26-50 isn't anywhere near 75%.  Using Matt Leichter's chart, which excludes law school funded jobs, the median school in this group placed 64% of its students.  And more evidence of how US News rankings provide bad guidance in this area: the 25th percentile placement rate for this cohort (USN 26-50 schools) is 58.5%. 

But don't assume that things are super-rosy for the higher ranked schools.  I looked at schools ranked 12-24 and discovered that their median LTFT JD (non-funded) placement rate was 67.8%.   That made me wonder how many Top 50 schools even matched that 83% placement rate implied by the WSJ data for the Top 25.  The answer: 7.  How many hit 89%  identified for the Top 10?  

Ruh-roh.  None.

I recognize that there's apples to oranges action here.  First, I excluded law school funded jobs.  That has a big effect because, looking at the top 4 placing schools even in the Leichter world (excluding law school funded jobs), you discover that each of them places over 5% of their total graduating class in school-funded positions (NYU >8%, Columbia and Chicago >6%, and Penn >5%).  Columbia had the best placement data of any law school within these parameters, and it placed 88.3% of its students excluding law school funded positions.  Not a single school places 89% of its grads in these jobs without a little boost from the school itself. 

Second, I used medians for each school rather than placing all the students from all of the schools in one basket and tallying the percentage placement rate.  But my choice makes visible the way in which large, high-placing schools - like Harvard, Columbia and NYU - skew the WSJ data.  If a prospective student is assessing law schools, she might not realize that the strong placement rates for the Top 50, or even Top 25, are really driven by a few large, super-elite schools.  

As I have said before - along with everyone from Brian Leiter to Kyle McEntee - US News is pretty unhelpful as a tool for  picking law schools.  That unhelpfulness is compounded by the way in which the WSJ sliced and diced the data.  It is one thing for the WSJ to report US News rankings.  I have to concede that for much of the paper's readership,  the rankings are newsworthy.  My objection here is to the ways in which it then manipulated the rankings to create new information even more misleading than the rankings themselves.

Comments

[JM]

USNews is fine. The best 10 schools are in the top 10. The next best 15 (or so) schools are all in the top 30. The garbage schools that have no reason to exist are outside the top 100.

Basically, it gets the large bands right. Whether a school is 44 or 78 is completely irrelevant.

[Brian Tamanaha]

Dan,

I agree with your criticisms of the WSJ piece, but your final sentence is off key: "it then manipulated the rankings." Your main criticism is that it is misleading for WSJ to include school funded jobs.

Fair enough, but perhaps you should direct some of your criticism at law schools for creating misleading stats. To answer your previous post, part of the reason it is "so hard to report on law schools" is that law schools have been manipulating numbers for ranking purposes for over a decade. It should not be surprising that outsiders have difficulty seeing through our unreliable numbers. Your phrase "manipulated the rankings" applies to law schools far more than to WSJ. As I said, I agree with your criticisms, but laying all the blame on the reporters for the misleading aspects of their piece seems only half right.

Brian

[anon]

Dan:

You are beginning to sound like a hysterical "scam blogger" ...! Are you questioning facts, as reported by distinguished sources? Are you one of those cyber miscreants who are never satisfied?

More seriously, as Brian says, the underlying data is the true reason that stats are often presented in misleading ways. Law schools are becoming ever more creative in finding ways to avoid simply disclosing abysmal LTFT JD required placement numbers: the stat that is most meaningful to those attending law school to prepare for a career in law.

Finally, an obsession with and reliance upon rankings isn't limited to USNWR. One usually finds that, ultimately, the supposedly "better" rankings wind up not being much different from the demonized USNWR.

The main difference seems to be that the supposedly "better" rankings are presented with a lot of haughty chest pounding and negative comparisons with others' ranking "services."

[Stats on Post-Law-School-Funded-Jobs Jobs?]

Don't a lot of students get jobs after the law school funded jobs? Don't just blindly criticize them unless you have some sense of whether they lead to jobs.

Also, could we get a broader perspective? Simkovic/McIntyre shows a rapid rise in JD-degree holders' incomes during their first 10 years in the labor market--the same is true for many other people entering the labor market. So why the obsession with salary in the first year of the first job?

The reason should be obvious: it's probably the lowest salary figure that the anti-law school crowd can find. It's time to face the fact that they are stacking the deck. They don't count JD advantage jobs, even though many students prefer them. They don't count school funded jobs, even though many people get non-school-funded jobs immediately after their school funded jobs. They cite a "$250,000 cost of going to law school" even though discounting of tuition is pervasive (at many great schools the median net payment is 50 to 60% of sticker price), opportunity costs and housing costs widely vary, etc.

So here's what the 9-month, JD-required fixation will probably bring: lots of people who should be counseled on the JD-advantage jobs they want, will get steered toward low level (but JD-required!) jobs that pressured schools feel they need to boost in order to get higher ATL/LST/etc. rankings. I'm sure there are a lot more distortions I can't even imagine. The reductionism and innumeracy never cease to amaze me.

[anon]

Now, there's the kind of defense we have come to expect!

Funny thing is, though, one usually doesn't see this sort of calumny directed at someone like Dan: "They don't count school funded jobs, even though many people get non-school-funded jobs immediately after their school funded jobs."

The tired reference to "Simkovic/McIntyre" is sort of risible at this point. The S&M paper purported to show that "Law Degree Holders Earn Significantly More than Similar Workers Whose Highest Degree is Bachelor’s."

Really? Who knew? This earthshattering observation really ends the discussion doesn't it? Just waive it around like a bloody shirt, and everyone else will appear to be foolish!

Historically, over the course of a very long time, S&M found, most persons who obtained a professional degree fared better financially than persons who obtained no graduate degree! Wow! Sorry, but that is not really very impressive in this context, especially because, as they say, times have changed.

So, let's not take SOPLSFJJ's comment point for point. All we really need to do is consider this assertion, and the "facts" that (are not presented to) support it: "They don't count JD advantage jobs, even though many students prefer them."

Ah yes, the "they" of one's imagination; the horde of "theys" who are all "anti law school." Of course, law schools need no improvement (especially in the respect addressed by Dan's post and Brian's comment: disclosure.) "They" are just "anti law school" and have no desire to improve anything!

Why not opine about the motivation of a hypothetical student to spend three years and hundreds of thousands of dollars (in the main) to obtain a law degree that is unnecessary to obtain the employment preferred in the first place? After all, the "anti law school" crowd doesn't want that student to attend law school in any event!

[ATLprof]

Dan, where do judicial clerkships fit into the picture? Are those counted as LTFT JD required or something else? I would expect they are counted as LTFT JD required, but if not, what are the percentages of judicial clerkships like at top schools?

[Former Editor]

Stats:

Your assertions about the data don't seem to be founded. I'm not aware of any data showing the percentage of law school funded jobs that become real jobs. If you are aware of some reliable source indicating the conversion rate of law school funded jobs to FT/LT legal employment, please reference it. I would love to analyze it.

Regarding JD advantage jobs, please reference your evidence that "many students prefer them." The only information on this I'm aware of is the NALP data that shows 43% of JD Advantage job holders are actively seeking other positions. That's nearly triple the percentage seeking who have jobs requiring bar passage and pretty close to the percentage seeking for "other professional." Those numbers do not show any sort of preference for those jobs to speak of. If you have some objective data on student preference for JD advantage jobs, please proffer it.

As for a broader perspective, the focus on first year salary is important because, as even Simkovic/McIntyre admit in their paper, first year salary has a significant long term effect on overall earning potential. Regarding the predictions in the Simkovic/McIntyre study more generally, the study is flawed in a number of ways. Probably most importantly for this discussion, the study contains no data, at all, from any graduating class from 2008 onward. In other words, all of the data is from before the ongoing industry restructuring that has so many concerned. I'm not sure what more is needed to toss its conclusions aside as no longer relevant.

As for borrowing, discounting only goes so far and starting salary becomes relevant again here. Median debt for a law school grad in the US is 141k, 75th percentile is 194k. Those yield monthly payments on debt of $1,200 to $1,600 a month without (rapidly becoming endangered) government programs limiting the payments due for fifteen years. AND I'm stopping now because...

@ anon 2:43

Your comment just popped up. You have convinced me not to bother with the rest of the point by point refutation.

[Former Editor]

@ ATLprof

Judicial clerkships are expressly included in the Bar Passage Required category and, so long as they last at least a year (which pretty much all do), they count as long term. So, yes, unless something weird is going on with a clerkship it would count as LTFT JD required jobs in the ABA data.

[ATLprof]

Thanks, FE.

[Barry]

"Don't a lot of students get jobs after the law school funded jobs? Don't just blindly criticize them unless you have some sense of whether they lead to jobs."

First, these are students who have been passed over by the on campus recruiting wave, and have not gotten a job on their own in the several months after graduation (and bar passage). They probably get *some* job, but it'd be really strange if they got jobs as good as those who were hired through OCI.

[Barry]

Former editor: "As for borrowing, discounting only goes so far and starting salary becomes relevant again here. Median debt for a law school grad in the US is 141k, 75th percentile is 194k. Those yield monthly payments on debt of $1,200 to $1,600 a month without (rapidly becoming endangered) government programs limiting the payments due for fifteen years. AND I'm stopping now because..."

The 'scambloggers' are actually rather soft on law schools here. Given the massive cost of law schools, 'full-time permanent bar-passage required' jobs are not sufficient. If one does not get into 'BigLaw', their chance at paying off that debt is poor; and they definitely were financially ruined by law school.

[Barry]

"Simkovic/McIntyre shows a rapid rise in JD-degree holders' incomes during their first 10 years in the labor market--the same is true for many other people entering the labor market. So why the obsession with salary in the first year of the first job?"

First, because they are the only stats available - law schools have shown 0 interesting in tracking their grads further. Odd, that, if the numbers would actually make the law schools look good.

Second, because those who didn't 'real lawyer' jobs by nine months after graduation have failed in two waves - OCI and ordinary job hunting. The way that the labor market works makes it very unlikely that jobs obtained after being 'passed over' twice will match the jobs obtained by grads who succeeded.

Also: 'Simkovic/McIntyre shows a rapid rise in JD-degree holders' incomes during their first 10 years in the labor market--the same is true for many other people entering the labor market. So why the obsession with salary in the first year of the first job?'

Bullsh*t, pure and simple. The highest-paid law jobs also carry a 85-90% chance of being laid off at 5-7 years into their profession. No other profession sees that sort of hit.

[No, breh.]

Even accepting Simkovic and other guy's poor controls and assumptions about the market for JD's, does it not still take something like a decade for the average JD just to break even if you spread the gains from the JD evenly across their career? That should put the average JD at a net zero gain at around age 36 or 37. I'd venture that even that result is a little hard to stomach if, you know, you'd like to retire someday.

[Ronald Johns]

Is there an article about what happens to those students who end up in school funded jobs after the school funding ends? Are they getting good placement? Or are they having problems securing permanent employment?

[antiro]

I submit that we should use a new standard for what we should look for in optimal outcomes:

A salary sufficient to cover the average law student loans at the particular law school. Who cares if it's full time or part time or bar passage required or JD advantage if the person can afford their student loan payments while being able to be a consumer and build equity?

[anon]

Antiro
That's definitely a logical thought.

However, if one attends law school with the goal of becoming an attorney (as the vast majority of law school students do) then law school must be a professional institution geared toward bar passage and gainful participation in the legal system.

Law schools, at least traditionally, have not been designed to act as micro universities, housing historians, economists, philosophers, etc., who basically know little or nothing first-hand about the practice of law. (Each of these disciplines has its place, of course, it is a matter of focus and emphasis that matters most.)

More of the present dysfunction in the legal academy is attributable to naïve and misguided governance by law faculties (who utterly failed to anticipate and have miserably failed respond to changing needs in the dynamic market for legal services) and the outright and unseemly greed and unethical pursuit of money associated with the proliferation of new law schools and unconscionable tuition increases designed to take advantage of loose federal student loan money.

[Barry]

antiro "A salary sufficient to cover the average law student loans at the particular law school. Who cares if it's full time or part time or bar passage required or JD advantage if the person can afford their student loan payments while being able to be a consumer and build equity?"

I would agree that this is the minimum, if you meant a (post-tax) salary *bump* sufficient,....

If a college grad, 3-4 years out of college, could expect to earn $30K, then we should subtract $30K from the starting salary, then subtract at least 25% from the remainder, and then see if it's at least $1,500/month.

[Former Editor]

@ Barry 5:34

That's actually exactly where I was going before I decided to stop responding point by point. The NALP 2012 numbers on median public sector salaries 5 years out range from $50k to $62k. Operating on some rather basic assumptions, folks in this bracket are looking at a 15% federal tax rate (that's the IRS rate for this bracket) and a 6.7% state+local tax rate (this is the median number from the 2014 Tax Foundation page). This brings the income range, after taxes, to $36.5k to $48.5k per year. A $1,200 bill every month is $14.4k in student loan payments per year. That brings median annual take home for public sector attorneys five years after graduation down to $22.1k to $30.1k per year, or $1,842 to $2,508 per month. And this is at the median for those who found stable employment and now have five years of experience.

@ Barry 8:43

I'm not quite sure where I'd find numbers on five years out for college grads. Going off of numbers from one year out, from NACE's 2013 press release, starting grad salaries average (I don't see a reported median) at around $45k. Taking the same amount of taxes out, that leaves them with $35.2k a year or $2,933 per month. Their average debt (again I'm having trouble easily finding a median) is $29.5k according to CNN money. At the same rate and terms used in the NAF report (6%, 15 years), that becomes a monthly payment of around $250 per month. Subtracting the loans out, then, take home would be $2,683 per month or so. In other words, the average employed college grad, with average college loans, has a higher take home after taxes and loan payments right off the bat than the median public sector law grad, with median loans, five years out.

It's tough to see where the "premium" is for most grads.

@ Antiro

Generally speaking, I agree. Sometimes I wonder about the ABA's authority to even accredit an institution that does not send the majority of its graduates in to the practice of law. Isn't the ABA an organization that regulates attorneys (as opposed to those with a particular graduate degree)?

[Anon]

First, Simkovic and McIntyre (i.e., the U.S. Census Bureau Survey of Income and Program Participation) are not the only stats available. The After the JD study also shows a rapid increase in earnings for grads in their first 10 years.

Second, Simkovic and McIntyre look at the earnings at every age group both for JDs and similar BAs, and they found that the earnings increase much more quickly for the JDs and the earnings premium gets bigger as graduates age and gain experience.

The reason people keep bringing up Simkovic & McIntyre is because bloggers keep making claims that are contrary to the facts.

[Stats on Post-Law-School-Funded-Jobs Jobs?]

To people saying that Simkovic and McIntyre are outdated: here's an update of the paper with post-2008 data:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2379146

Did not materially change the calculations.