Monday, June 29, 2009
[posted by Bill Henderson, crossposted to ELS Blog]
NALP has just posted
its entry-level starting salary for class of 2008--i.e., the lawyers
who started their jobs just as Bear Sterns and Lehman Bros unraveled
and the credit markets completely froze up.
Of the 22,305 law school graduates, a remarkable 23% (5,130 members of the class of 2008) reported an entry-level salary of $160,000. In contrast, 42% of entry level lawyers reported salaries in the $40,000 to $65,000 range. Once again, the central tendencies are a poor guide to the distribution as a whole: whereas the mean salary is a $92,000, the median salary was $72,000. Further, the two modes ($50,000 and $160,000) are separated by $110,000.
Amidst all the layoffs, deferrals, salary cuts, and apprenticeship programs announced in 2009, it is safe to venture that the bi-modal era has peaked. Every law school class for the foreseeable future will graduate to a much different economic landscape. Although many students will regret the opportunity to earn such a big payday upon graduation, it brought with it intense billing pressure, client resentment, heavy leverage, and very little substantive training for new hires. I would argue that profession as a whole (including current and future graduating classes) is better off with a lower entry level salary.
Admittedly that is a long-term view for the profession as a whole. In the short term, current students and recent graduates are in a world of hurt. Specifically, law school debt loads continue to climb. Thus, law schools are (rightfully) going to be under increased pressure to deliver value to our students. I don't think most law professors and law school administrators fully appreciate the difficult times ahead. For a provocative take on the current state of legal education, see Paul Lippe, Welcome to the Future: Time for Law School 4.0.
For some perspective on how this crazy market evolved, see:
- Henderson, Distribution of Starting Salaries for 2006: Best Graphic of the Year (Sept. 4, 2007)
- Henderson, How the Cravath System Created the Bi-Modal Distribution (July 18, 2008)
- Henderson, Class of 2007: A More Extreme Bi-Modal Distribution (July 30, 2008)
- NALP, A Picture is Worth 1,000 Words (Sept. 2007).
After the jump are the distributions from 1991, 2006, and 2007. The primary takeaway is that the bi-modal did not exist in the early 1990s. It first emerged in 2000 (with the dot.com salary wars) and became progressively more extreme as the decade unfolded. On Wednesday, I have an article coming out in the NALP Bulletin, entitled "The Bursting of the Pedigree Bubble," which will provide some additional analysis.