Sunday, June 30, 2013

The Competition is for Full-Time, Professional Law-Related Jobs, Part II

As noted in Part I of this post, the competitive dynamics among law schools are about to change due to a combination of two factors: (1) the ABA's collection and publication more granular data on school-level employment outcomes, and (2) the decision by U.S. News to make JD Bar Passage Required and JD Advantaged the primary measures for the employed-at-9-months input to its rankngs formula.

The histogram below reveals a near perfect bell curve for this revamped US News input [click on to enlarge].  This is a huge change from prior years when schools were all bunched at the 95% level because employment of any kind was all that mattered.  Under the old methodology, any law school that limited itself to full-time, professional law-related jobs would have plummeted in the rankings 10 to 50 spots. 

USNewsjobsinput2013
Because spring 2013 was the first year with the new methodology, the impact of the change is not well understood.  The most stark fact of the new environment is that the full-time, professional law-related jobs are in short supply.  Among the class of 2011 (the stats used for the 2013 rankings), this desirable outcome was achieved by only 63.0% of graduates.  When we subtract out full-time, long-term law-related professional jobs funded by law schools -- a luxury that only a small number of mostly first-tier law schools can afford -- the total drops to 61.9%.

Digging deeper, some other significant patterns emerge. 

800px-California_in_United_States.svgRegional labor markets really matter

The vast majority of law schools feed into the regional labor markets where they are located.  In places like California, those markets are saturated. 

Among the ABA-accredited law schools in California, 46.5% of the class of 2011 obtained full-time JD Bar Passage Required jobs. The comparable figure for the remaining ABA-accredited law schools was 56.0%.  Likewise, there is also a disparity for JD Advantage jobs: 6.2% in California versus 8.3% for schools in all other states.  In fact, among the 19 ranked California law schools, only four -- Stanford, UC Berkeley, USC, UCLA -- are above the 63.0% average for full-time, professional law-related jobs.

Based on these data, it should come as no suprise that no law school located in California went up in the 2013 U.S. News rankings. Stanford, USC, and Santa Clara hung onto their ranking, but 11 California law schools dropped, with an average decline of 11 spots.  Five other Calfornia schools remained in the unranked fourth-tier category. 

In contrast, some of the biggest winners in the methodology change were flagship public law schools that are relatively big fish in smaller regional markets.  Students at these schools tend to stay in-state and get JD Bar Passage Required jobs at rates far higher than the 54.9% average for the class of 2011 average. 

Below are the top 15 non-national public law schools based on the proportion of FT Bar Passage Required jobs. 

Barpassagejobs

Between 2012 and 2013, the average rankings gain for the above schools was +9 spots.  Among this group, the only school to go down in the rankings was ASU Law (-3).  And that decline was largely due to the fact that ASU reported a 98% employed-at-nine-months figure for the class of 2010--a figure that drew suggestions of aggressive gaming.  See Brian Tamanaha, When True Numbers Mislead, Balkanization, April 2, 2012.

The heavier weighting for JD Bar Passage Required jobs also benefits a handful of lower-ranked private law schools that are practice-oriented and tend to feed smaller firms within their regional areas.

  • Campbell (71.4% FT bar passage jobs) went from unranked to #126. 
  • South Texas (64.4% FT bar passage jobs) went from unranked to #144
  • St. Mary's (78.3% FT bar passage jobs) went from unranked to #140.

Part-Time Law Schools Dominate JD Advantaged Jobs

JD Advantaged Jobs count the same as JD Bar Passage Required Jobs.  But what, exactly, is included in this category?  According to the ABA,

A position in this category is one for which the employer sought an individual with a J.D., and perhaps even required a J.D., or for which the J.D. provided a demonstrable advantage in obtaining or performing the job, but which does not itself require bar passage or an active law license or involve practicing law. 

See ABA Class of 2012 (definitions).  Many professionals enroll in law school on a part-time basis to improve their career prospects.  It should be no surprise, then, that schools with part-time programs tend to be the largest producers of graduates with full-time JD Advantage jobs.  In many cases, it is the full-time job that the student held during law school -- and presumably retains upon graduation -- that confers the advantage. 

Of the top 10 schools based on the percentage of JD Advantage law school jobs, eight had part-time programs and the other two were located in a state capital, which tends to increase the number of opportunities related to government and public policy.

JDadvantagePTFT

The schools listed above gained an average of 3.5 spots in the rankings, albeit the average is pulled down by the inclusion of Southwestern, which had to weather the brutal California legal market. 

It is worth noting that the percentage of JD Advantage jobs is negatively correlated with the percentage of JD Bar Passage Required Jobs (-.33) .The table below summarizes the differences between schools with Part-time versus Full-Time only programs.

Parttimecomparison

The higher percentage of JD Advantage jobs (10.1% versus 6.9%) for schools with part-time programs is unlikely the results of chance, as the differences in means are statistically signficant at p < .001.  But what does this inverse relationship mean?

Part-time programs tend to be affiliated with lower ranked law schools, which in turn would produce a lower average percentage of JD Bar Passage Required jobs.  Yet, part-time programs are also in larger, urban locations.  Thus, in addition to the continued employment of part-time students with their current employers, the sheer proximity to large, specialized regional economies probably increases the proportion of JD Advantage jobs.  Indeed, any school in an large metro area would be foolish to ignore the human capital needs of non-legal employers, as knowledge of the law is very helpful in navigating through an ever more complex, regulated, and interconnected world.

What is the Best Strategy for Maximizing Full-Time, Professional Law-Related Jobs?

Largely through happenstance, the ABA and U.S. News have created an environment where law schools have to ask this basic but very important question.  Part-time jobs will no longer cut it.  And few law schools have the cash to hire their own grads full-time for a year past graduation -- and if they do, there are probably better uses for the millions of dollars needed annually to prop up a school's ranking.

The new gold standard employment outcome is full-time, long-term professional law-related jobs. The issue of how to maximize this outcome is so pressing and intricate that it may warrant trade-offs in the admissions process, favoring students will lower credentials but more rock-solid employment prospects on the backend at graduation.  This is the topic I will take up in Part III. 

Part I

[posted by Bill Henderson]

June 30, 2013 in Blog posts worth reading, Data on legal education, Innovations in legal education, New and Noteworthy, Structural change | Permalink | Comments (8)

Friday, June 28, 2013

The Competition is for Full-Time, Professional Law-Related Jobs, Part I

NALP recently released the employment outcome data for the class of 2012.  The good news is that the absolute number of JD Bar Passage Required jobs went up from the prior year.  The bad news is that a significantly larger class of entry-level lawyers were competing for those jobs.  The class of 2011 totaled 41,623, versus 44,339 in 2012 (+2,716, or +6.5%).  And note, the class of 2013 is likely to be even bigger -- roughly +1.6% based on the size of the entering 1L classes in the fall of 2010 (see ABA enrollment data).

Setting aside the year-over-year flucuations, the trendlines suggest a relatively large and persistent shortfall in the number of full-time, professional law-related jobs.  I assembled the graph below from NALP data [click on to enlarge].

NALP 2007 to 2012 breakdown

[Methodological notes:  NALP used the JD-Preferred category until the class of 2011, when NALP and the ABA collaborated on the creation of the JD Advantage category.  According to NALP, the jobs in the two categories are "largely the same."  See NALP, Detailed Analysis of JD Advantage Jobs (April 2013).  The figures for 2012 are estimates of full-time employment calculated from (a) NALP's just released figures for 2012 class size and the percentage breakdowns by job category, and (b) the percentage breakdowns of full-time versus part-time from the prior year, which also relied on the new JD Advantage definition. In short, basic algebra.]

A reasonable expectation of a 3-year, $100,000+ financial commitment is that nine months after graduation, the entry-level lawyer has secured a full-time professional job. See Legal Whiteboard, June 26, 2007.  Those outcomes are reflected in the blue-red-green bars above.  Since 2007 (the first year that NALP collected data on full-time versus part-time employment), the percentage of jobs fitting these criteria has fallen from 85.0% to 73.9%.  So the overall size of the purple bar -- part-time jobs, nonprofessional, unemployment, etc. -- has grown from 15% to 26.1%.  

Unfortunately, the pain does not end there.  With a limited pool of  full-time professional jobs and the number of graduates trending upward, the law of supply and demand kicks in.  Consider this arc of median entry-level salaries of employed graduates: $65,748 for class of 2007, $72,000 for 2008, $72,000 for 2009, $63,000 for 2010, $60,000 for 2011, $61,245 for $2008.  So, in short, the odds of landing a full-time professional job have gone down, and so has the starting pay.  Yet, tuition and student debt continue to edge up.  These unsustainable trends have made law schools fair game for criticism by the media and law student bloggers.

That said, a market correction is clearly underway.   A considerable number of prospective law students are deciding (rationally) not to apply to law school -- from 98,700 when the class of 2007 enrolled in the fall of 2004 to an estimated 58,424 for the fall of 2013.  Likewise, law schools, to the extent they can afford it, are enrolling fewer students.   From the high water mark in the fall of 2010 (49,700), law schools only enrolled 41,400 1Ls in the fall of 2012, and the numbers are sure to be even lower this fall.  See Jerry Organ's estimates, Legal Whiteboard, May 20, 2013.  To weather this storm, law schools are running significant deficits or drawing down their endowments.

So, can we conclude that the market correction will be complete when the relatively small class of 2017 enters the job market four years from now?  I certainly think the smaller number of graduates will help.  But I would argue that two things have fundamentally changed:

1. Revenues versus credentials.  Law schools are struggling with the need to balance their desire to hang onto respectable LSAT/UGPA medians with a need to generate sufficient revenue to cover their operating costs.  If a law school favors revenues this year, its US News rankings could drop, affecting its applicant pool in future years.  On the other hand, the combination of shrinking 1L classes and lavish scholarships -- a strategy being pursued by dozens of law schools -- is unsustainable over the medium to long term.  A decision to enroll fewer students this year is a three-year commitment to lower revenue.  If the smaller entering class is repeated next fall, the budget pain doubles.  Do it three years running, and the revenue shortfall triples.  Many law schools are not trying to outrun the bear; they are trying to outrun other law schools in their regional market. Some law schools may not make it out of this trough.

2. Competition over full-time, professional law-related jobs. If there is one silver lining that has emerged from this troubled period in U.S. legal education, it is the willingness of the ABA to collect and publish more granular employment outcome data at the law school level.  In turn, U.S. News has incorporated these data into its rankings formula.  Instead of propping up our rankings by hiring our own students or benefiting when they got jobs nine months out working as a retail manager or a cab driver, under the new 2013 U.S. News rankings formula, only full-time, long-term jobs that are JD Bar Passage Required or JD Advantaged are given "full weight." 

It is this second point that is going to push change in how law schools do business--we now have an employment outcome in which the ranking payoff is now fully in allignment with what law students want--full-time, professional law-related jobs.

Specifically, the employed-at-nine-months input to the U.S. News rankings formula is currently given 14% weight.  According to the U.S. News law school rankings methodology, the magazine is weighting 22 of the 35 employment outcomes collected and published by the ABA.  Among these 22 factors, we don't know the internal weighting.  What we do know based on the "full weight" given to JD Bar Passage Required and JD Advantage jobs, is that the highest employed-at-nine-month scores will go to law schools with the highest percentages in these two categories. This is a completely new world for law schools -- one that incentivizes what law students care about when they make the decision to enroll.

Part II to follow ...

[Posted by Bill Henderson]

June 28, 2013 in Data on legal education, Innovations in legal education, New and Noteworthy, Structural change | Permalink | Comments (1)

Thursday, June 13, 2013

"There's A Lot of Money in that White Powder" - Telemarketing Edition

Posted by Jeff Lipshaw (cross-posted at PrawfsBlawg)

  UnknownThose were Sonny's words when the Don asked his view of the narcotics proposal Virgil Sollozzo was bringing to the Corleone Family.  The estimable Tom Hagen was more fulsome in his assessment:

Well, I say yes. There's more money potential in narcotics than anything else we're looking at. Now if we don't get into it, somebody else will. Maybe one of the Five Families, maybe all of them. Now with the money they earn, they can buy more police and political power; then they come after us. Now we have the unions, we have the gambling; an' they're the best things to have. But narcotics is a thing of the future. An' if we don't get a piece of that action, we risk everything we have -- I mean not now, but ah ten years from now.
There are many of us who believe that The Godfather is an inexhaustible source of appropriate metaphor, and this morning I apply it to a telephone marketing scheme from what you would think was an otherwise reputable company.   And with a certain humility given the number of decisions like this in which I was involved in my corporate career (one only hopes for the better - i.e. "there but for the grace of God go I"), I'm prepared to pass judgment on this one below the break.

Continue reading

June 13, 2013 | Permalink | Comments (0)

Wednesday, June 5, 2013

Empirical Evidence of Competencies Necessary for Advancement in Law Firms

For those trying to better understand how legal education can better prepare law students for the world that awaits them, I would encourage you to take a look at the draft article my colleague, Neil Hamilton, Director of the Holloran Center for Ethical Leadership in the Professions at the University of St. Thomas School of Law, recently posted on SSRN. The article is entitled Law-Firm Competency Models and Student Professional Success: Building on a Foundation of Professional Formation/Professionalism. Here is some of the description from the abstract:

A law student who understands legal employer competency models can differentiate him or herself from other graduates by using the three years of law school to develop (and to create supporting evidence to demonstrate) specific competencies beyond just knowledge of doctrinal law, legal analysis, and some written and oral communication skills. . . .

In Part I below, this essay analyzes all available empirical research on the values, virtues, capacities and skills in law firm competency models that define the competencies of the most effective and successful lawyers. Part II examines empirical evidence on the competencies that clients evaluate. Part III evaluates the competencies that make the most difference in fast-track associate and partnership promotions. These data and analyses lead to several bold propositions developed in Part IV:

1. Law students and legal educators should identify and understand the values, virtues, capacities and skills (the competencies) of highly effective and successful lawyers in different types of practice (one major example is law firm competency models analyzed below in Part I);

2. Each student should use all three years of experiences both inside and outside of law school (including the required and elective curriculum, extracurricular activities, and paid or pro bono work experiences) to develop and be able to demonstrate evidence of the competencies that legal employers and clients want in the student’s area of employment interest;

3. Law schools should develop a competency-based curriculum that helps each student develop and be able to demonstrate the competencies that legal employers and clients want; and

4. Both law students and law schools should understand that the values, virtues, capacities and skills of professional formation (professionalism) are the foundation for excellence at all of the competencies of an effective and successful lawyer.

The article presents far more useful information than can be summarized here, and different readers may be struck by different things discussed in the article. One of the most significant takeaways for me, however, is the convergence around an array of competencies frequently not taught in law school. The article analyzes competency models used to assess associate development at 14 medium to large law firms in the Twin Cities and compares that with some other literature on competencies clients look for in attorneys. The analysis demonstrates that in addition to traditionally understood technical skills – legal analysis, oral and written communication, and knowledge of the law – there is significant convergence around several competencies frequently not taught in law school – 1) Ability to initiate and maintain strong work and team relationships; 2) Good judgment/common sense/problem-solving; 3) Business development/marketing/client retention; 4) Project management including high quality, efficiency, and timeliness; 5) Dedication to client service/responsive to client; and 6) Initiative/ambition/drive/strong work ethic.

Whether law schools are going to be able to find efficient ways to offer students opportunities to develop these competencies, it is imperative that we make our students aware that they need to be developing these competencies to give themselves the greatest likelihood of professional success.

[posted by Jerry Organ]

June 5, 2013 in Data on legal education, Data on the profession, Important research, Innovations in legal education, Law Firms, Scholarship on legal education, Scholarship on the legal profession | Permalink | Comments (0)