Law school employment statistics should be audited

A commenter at the WSJ Law Blog wrote:

[T]here needs to be reform/abolition of the ABA’s law school accreditation and new, uniform, SEC like reporting requirements for law school admission and employment statistics.

As far as I know, I was the first person to suggest that law school employment statistics need to be treated like public corporations’ financial statements. They need to be reported according to standardized principles, and they need to be audited by independent auditors.

My idea is finally being spread about.

The WSJ Blog post quotes an anonymous lawyer from Texas explaining the reality of solo practice:

Most of the solo attys I know here in Texas are about to go broke, at least from what I am hearing. Family law and criminal defense attys have really been hit hard. It’s always been that way. Come to think of it, going solo is usually followed by going into another profession entirely.

This is the outcome of supply and demand. There are zillions of law school graduates with nothing else better to do. The 80/20 principle probably applies to solo practitioners, that is there are 20% who are doing pretty well, and the other 80% are as described above.

Because of marketing economies of scale, all of the most profitable legal work goes to BIGLAW.

A thanks to Exposing the Law School Scam for pointing me to this WSJ blog post.

Comments

[Peter]

Nothing is going to change. As long as so many people suffer from It Won't Happen to Me Syndrome and Can't Do Syndrome,* law schools will continue to be inundated with applicants. And as long as the federal government makes unlimited amounts of student loan money available** with virtually no strings attached.

* = Can't Do Syndrome: can't do math, can't do science, can't do computers. It Won't Happen to Me Syndrome should be self-explanatory.

** = money which must be paid back, though no one seems to grasp that point.

[Turambar]

Reading all of the complaints from the law temps is enlightening- makes IT look real good.

I do wonder why some of these people dont get together and make their own small firm if conditions are as bad as they say. In the past I have worked with an IP lawyer who worked out of her house- seems like a reasonable option to at least try to go out on your own. You probably need highspeed internet, some vonage lines, a gotomeeting or similar service and a law library subscription. Yeah you still have student loans to service but it would seem that with lowover head, and daytime AM radio advertising rates so cheap you ought to be able to easily beat the $35K/yr these BigLaw temps are getting.

[DaveinHackensack]

The issue seems to be that there's no feedback mechanism to limit the number of law school spots, as there is with med school. Med school spots are, as I understand it, limited by clerkship spots available at hospitals, so there's a feedback mechanism that prevents med schools from accepting more applicants than they'll be able to place as clerks in a couple of years, etc.

Because there's no mechanism to limit the number of attorneys, you can't just put out a shingle for your sole practice and expect to be successful. You need to network and hustle like most other businessmen have to do. There's still plenty of profitable legal work available for business savvy and connected sole practice attorneys. I'm about to send an e-mail to one of them, in fact. This guy does some micro cap securities work (e.g., reverse mergers, etc.) but also invests in deals alongside some niche investment bankers he works with.

[Alex]

Peter wrote:

"Nothing is going to change. As long as so many people suffer from It Won't Happen to Me Syndrome and Can't Do Syndrome,* law schools will continue to be inundated with applicants. And as long as the federal government makes unlimited amounts of student loan money available** with virtually no strings attached."

--

The problem is larger than that. As long as people believe that going to college makes one intelligent and going to law school makes one a talented attorney, then they will be able to convince themselves that going into large amounts of debt are worth it.

For a long time I wondered why colleges didn't just admit students based on grades and SATs, but then it hit me. Colleges want to make the admissions process complicated and mysterious to create the perception that students who go to prestigious schools have a property that goes beyond intelligence, that can only become bestowed upon a person if they are admitted to a prestigious university.

[Jack]

"Can't Do Syndrome: can't do math, can't do science, can't do computers. It Won't Happen to Me Syndrome should be self-explanatory."

Plenty of people in law school can "do" math, science, or computers. I can. People in scientific fields don't have it easy either. I mean goodness, just look at all the frustrated nerdy bloggers that work in these fields. To make science/engineering look like some panacea, with outsourcing is ridiculous. Plus, at least in law school, you'll probably get laid at some point.

[dearieme]

Adam Smith commented on the permanent surplus of lawyers. You'd think that a public warning that's been available for more than 300 years might be noticed.

[Jared]

Why stop with just law schools? Colleges should be forced to keep statistics on the earnings of all their graduates so that students in the career counseling office actually know what to expect once they get out. This would be more valuable than trying to figure out what kind of job someone should do because they have an "investigative personality" or what they want to do with their life at age 18 - 20.

[Zeenon]

@Alex people that go to prestigious universities (real ones like HSYP) do have a property that goes beyond intelligence. They either leadership material, lucky, wealthy, or connected.

[Matt]

When I left the Attorney General's Office and went into private practice as a sole practitioner, I had some doubts, but bumped into a lawyer I hadn't seen in years. His point, by way of encouragement, was along the lines of "Yes, there are a lot of attorneys in Maine, but there are not a lot of GOOD attorneys in Maine."
I have very low overhead, do criminal court appointed criminal work, occasionally get a paying client. There is more than enough work to do, and I probably average 30 billable hours a week at $75 dollars an hour. Not BigLaw money, but I come and go as I wish, I'm always home by 5:30, and no BigLaw stress to deal with. Hey, I've already made partner!

[Anthony]

Peter, you are constantly commenting on this blog and making the same silly, overgeneralized point. That all attorneys only became attorneys because they cannot "do math, science etc." This is an absurd over simplification. The reality is that most attorneys who went to reputable schools, yes even the "toilets" like Cardozo, and who aren't minorities who were the beneficiaries of affirmative action, received LSAT scores placing them in the top 5% of the population in terms of intelligence. If they wanted to "do math" they could, not everyone wants to be an engineer, etc. The lSAT is an extremely rigorous test of logic and analytical reasoning, the very skill that mathematics demands. Instead of badmouthing lawyers, why don't you talk to some talented lawyers and let them explain some interesting, complicated legal concept to you; you might be surprised at how interesting the law can be.

[Peter A]

The interesting story from Exposing the Law School Scam that no one here seems to have mentioned yet is the growing trend for Big Law to outsource work to cheaper lawyers overseas. Looks the painful effects of immigration and outsourcing are beginning to hit the upper middle class a little more directly.

[Peter]

"Peter, you are constantly commenting on this blog and making the same silly, overgeneralized point. That all attorneys only became attorneys because they cannot "do math, science etc." This is an absurd over simplification. The reality is that most attorneys who went to reputable schools, yes even the "toilets" like Cardozo, and who aren't minorities who were the beneficiaries of affirmative action, received LSAT scores placing them in the top 5% of the population in terms of intelligence. If they wanted to "do math" they could, not everyone wants to be an engineer, etc."

Not true. Let's consider law school vs. engineering. Law is a classic tournament field, with a small (and diminishing) chance of making big money offset by a much greater (and rising) chance of not even being able to earn a lower middle class living. Engineering, in sharp contrast, is as close to a Guaranteed Sure Thing as exists in human life. Get an engineering degree and you're set for life, assured of earning a solidly middle class or sometimes upper middle class living.

There's no comparison whatsoever. And yet, there's a bursting-at-the-seams law school seemingly on every other block, even while university engineering departments struggle to attract enough students to remain open. Something is very, very wrong.

[Gannon]

During the last decades wealth (gross domesic product) in the first world has risen through higher productivity but real wages have sunk. Through globalization and more women in the work place supply of uneducated labour has increased, thus bringing wages for unskilled workers down. So far so good. According to economists like Lester Turow the wealth increase of the last decades has gone to capitalowners and university educated. Capital owners have become much richer, there is no doubt about that. But I don't see professionals becoming richer. In most countries, even in Latinamerica, more and more people are getting terciary education degrees. But if 40% of the workforce has a terciary education, the degrees become more and more meaningless and doesnt't guarantee good pay. The worth of a college degree is like a high school diploma 30 years ago. During the lifetime of my grand parents and to a certain degree my parent's a university degree guaranteed at least a comfortable lifestyle. This isn't the case anymore. A lawyer myself, I work with a partner "solo" viewing family and criminal cases. My income allows me a high middle class income, but I won't be getting rich this way. More and more I see capital ownership and entrepeneuralism as the only way to reach real wealth. And the law is still a decent profession compared to careers like architecture, psicology, sociology, political science and even most business administrators and economists.
Half Sigma's inability to get a job as a lawyer is probably age realted. To start a career as a lawyer, idealy your age should be somewhere between 25-30. No company is interested in a fortysomething lawyer without work experience. Trying to get a job as a fortysomething year old lawyer with no work experience is like a fortysomething woman looking to marry a millionare.
Half Sigma's best option is to start solo, idealy under the supervision of a friend who already has experience in the field, to avoid malpractice.

[EMPhan]

Matt,

I'm in a similar situation as you, except for accounting. It's a win-win situation for both me and my clients - they pay less and I get 100% of the fee income. I never, ever want to go back to a 9-5 job with a boss, stupid meetings, and awful traffic. Here, I'm the boss, we don't do meetings, and I do most of the work remotely. And I work less, set my own schedule, and make more.

[Douglas Knight]

"marketing economies of scale"

Are you sure that's the explanation of BIGLAW? Obviously, they're selling prestige. But maybe that's what their customers really need. To a first approximation, don't judges (not juries) decide based on whose lawyer is more prestigious? It's probably relevant to contract negotiation, too.

[The Engineer]

While Peter overstates engineering a bit, the fact is that you can get an engineering degree in 4 years from a state school and get a job paying a starting salary of upwards of 60k. You might peak out not much higher than that, though.

But get your company to pay for an MBA part time, and you'll have what it takes to move into management, with higher salaries.

So engineering offers:

1) much lower cost of entry

2) much earlier entry into the workforce (no later than 22 yo makes for a huge difference in wealth by the time that you retire).

3) Higher starting salary. Starting salary at my company is $75k. Chem E's start over $80k.

But Alex is correct, you ain't gonna get laid going to engineering school. Far from it, in fact.

[The Engineer]

Only thing I may have done differently, if I could do it over, was take the undergrad business classes needed to pass out of all the MBA pre-reqs. Accounting, marketing, etc. etc. Getting an MBA in 30 credit hours instead of 45 would be a huge cost and time savings.

[outlaw josey wales]

What is this, Above the Law?

Anyway law school is a scam (I'm a law student), and so is part of the legal profession. Where else can you go to school and not learn how to do your job then make $160K starting while learning on the job? It's awesome!

Law students without any real life job experience (i.e. right out of undergrad) are the biggest entitlement whores in the world. An engineer can go to law school, while the typical law student would die in engineering (I have a PhD in a scientific discipline).

Generally no one wants to hire old(er) people, but IP law is an exception because older people will have PhD's that are useful for patent related work (and firms can say look at all the competent scientists we have).

There are too many law schools.

[Turambar]

" It's a win-win situation for both me and my clients - they pay less and I get 100% of the fee income. I never, ever want to go back to a 9-5 job with a boss, stupid meetings, and awful traffic. Here, I'm the boss, we don't do meetings, and I do most of the work remotely."

When are you going to diversity training? I work for a Fortune 20 company and so far this year I have had 10 mandatory HR courses- ergonomics, record retention, diversity, sexual harassment, sexual harassment issues for managers, asset protection, disability issues, safe driving etc... Argh! And of course there is no budget for technical training.

[Peter A]

I have yet to meet a high level executive with an engineering background in any large corporation. I think engineers generally lack the social skills necessary to make it to the top. Finance and Sales seem to be the best initial career paths, but of course a person who is good at Sales probably already has the necessary personality to build allies and move up an organization. Engineers rarely have that personality - and they are at high risk of getting laid off in their late 40s, probably even higher now given the way we continue to outsource skilled jobs overseas.

[Turambar]

Check Ed Whiteacre former AT&T now GM chairman:
http://en.wikipedia.org/wiki/Edward_Whitacre,_Jr.

[Jack]

"Engineering, in sharp contrast, is as close to a Guaranteed Sure Thing as exists in human life. Get an engineering degree and you're set for life, assured of earning a solidly middle class or sometimes upper middle class living. "

A sure thing for what? Haven't you seen "Office Space"?

[Ronald]

I have posted here before - I run a small private equity firm and serve on the board of directors of the companies I invest in. I frequently am asked for career advice by my nephews and have given a lot of thought to this.

For those kids in college that have great social skills, are very persuasive, and have great critical thinking skills, and great work ethic, I highly recommend private equity. Private equity is a tournament, so you are foolish to go in to it unless you are pretty sure you are among the best of those going in to it. I am able to honestly tell me nephews the odds they will win and the odds they will lose

That being said, most of the kids in college are not private equity material. When they ask me for career advice, I generally say the following -

if their IQ is very high but their personality makes them unsuited to private equity, I suggest they go in to anesthesiology. My understanding is that anesthesiology is a very good field, with very safe income stream in the $300 thousand a year range.

For those not quite smart enough to do anesthesiology I suggest they become orthodontists.

however, for those that can't quite make it in to dental school, I am lost for career advice. Half Sigma makes a good case that i should not send them to law school. So what is the concensus here? A college kid who is not that outgoing, not that persuasive in a conversation, and is just a little below the IQ level needed for dental school - where should I send him as a career

My questions are sincere and the help is much appreciated - I believe the best that someone like me can do for the younger generation is to tell them the truth, and sometimes that means shattering their dreams. I mean if they lack the talent and tell me they are going in to a field that requires it, I am blunt in trying to shoot them down.

[RobinFinck]

Ronald - Pharmacy. If not that, then engineering or, as a last resort, Big 4 accounting.

[Jack]

Lawyers on average are at least as smart as dentists.

[Peter]

"Half Sigma makes a good case that i should not send them to law school. So what is the concensus here? A college kid who is not that outgoing, not that persuasive in a conversation, and is just a little below the IQ level needed for dental school - where should I send him as a career"

Pharmacy and accounting have been suggested as good choices.

[Stu]

Robin
thanks for the comment - however isn't the demand for pharmacists just a regulatory artifact? I mean the regulators require a pharmacist to be present when drugs are dispensed - but couldn't you see a system where pharmacists are no longer required - already there are machines in hospitals that dispense pills and substitute for pharmacists -

the government sometimes turns against a specialty - for example, in many states now, x rays are sent to radiologists in india and sri lanka - these radiologists read them and then send in the readings. This greatly reduces the demand for radiologists on site in those states

why wouldn't the same thing happen to pharmacists?

[C_Q]

Someone in possession of an above-average verbal IQ who doesn't want to go into law or programming, can make a decent living in advertising/marketing. Salaries for advertising copywriters in urban areas (NYC in particular) are fairly high--though admittedly not BIGLAW caliber.

That said, ambitious copywriters with business savvy can progress into management positions such as Creative Director that come with much bigger salaries. While you'll likely need an undergrad degree to land a job at an ad agency, you don't really need any specific training for the job.

As far as I can tell, copywriter training takes place on the job via apprentice-like relationships with more experienced writers and editors.

Once you've developed a portfolio with reputable clients, it's possible to venture out as a freelancer earning $75-$100 an hour, possibly more.

Half Sigma probably would make a pretty good copywriter come to think of it.

[Truth(er)]

How would you go about going into Private Equity? What are the odds of transitioning in from other fields?

[Truth(er)]

I keep hearing about these sky-high engineering starting salaries. I even saw a survey in "Machine Design" magazine. And, yet, for some reason, something does not wash.

May it be the case that only a small percentage of engineering students are actually employed as engineers?

[DaveinHackensack]

Pharmacy (getting into and through the school, no working as a pharmacist) probably requires a higher IQ than being a dentist does.

Ronald ought to consider recommending optometry to his nieces or nephews. I went out with a girl once who was an optometrist -- she got a combined bachelors/doctorate from some SUNY school in 5 or 6 years and was probably making as much as a pharmacist with reasonable hours and no stress.

[Peter]

"But Alex is correct, you ain't gonna get laid going to engineering school. Far from it, in fact."

Is that because of (a) the image of engineering and its effects on women, or (b) something in the personality of engineering students? I'm leaning toward (b). It sounds unlikely that if a man who is an Alpha or at least a high Beta is hitting it off pretty well with a chick in a nightclub or elsewhere, that she's suddenly going to slam shut the gates to the Secret Garden upon finding out that the man is an engineering student. It's more likely that the engineering student is too introverted to approach chicks in the first place and spends his time playing WoW or D&D.

[The Engineer]

I have yet to meet a high level executive with an engineering background in any large corporation.

Overstated.

In fact, MBAs were originally designed to give engineers the business skills they needed to lead. Even today, it's a pretty killer combination.

Don't confuse correlation with causation. OK, engineering attracts a lot of dorks. But that doesn't mean that engineers with social skills can't be as successful as they would be in other professions.

There's a lot of preconceived notions as to what engineers are and are not that really don't have anything to do with engineering per se. In fact, a naturally social person would do pretty well in engineering.

Every position I've had has been heavily team oriented, with lots of sales type situations. Plenty of customer interaction, supplier interaction, etc.

[Matt]

Regarding Engineers making money as compared to Lawyers . . .

I used to work as a paralegal for Shaw, Pittman, Potts & Trowbridge, which may be BigLaw, (now they are part of Pillsbury, which I thought made the dough you eat). William Barr was from there when he became A.G. Anyway:

A big part of the firm supposedly developed out of a small boutique firm made up of former Navy nuclear engineers who went to law school on the GI Bill or something. They had law degrees, and knew the fuel cycle, which was (and probably still is) a rare combination. The first big break they had was landing Karen Silk as a client, then the represented the utility that owned the Three Mile Island reactor. After that they had things pretty well locked up.

Here's a snippet of the website.

Technical Knowledge and Experience

Because the nuclear energy, coal, and gas industries are so heavily regulated, providing legal representation in those areas requires extraordinary technical knowledge and legal experience. Many of the lawyers in our energy group hold graduate degrees in engineering and the sciences and have held positions in the U.S. Navy, electric companies, and nuclear facilities. Some have served as counsel to the U.S. Nuclear Regulatory Commission (NRC), the U.S. Department of Energy (DOE), and the Atomic Energy Commission.

So maybe the answer is Engineering undergrad (or oil exploration Geology) followed by a brief career then law school.

[Alex]

Truther wrote:

"May it be the case that only a small percentage of engineering students are actually employed as engineers?"

--

Aside from computer engineers working as computer scientists, I can't think of an examples of engineering majors flooding non-engineering jobs.

[Jack]

I'd guess part of the problem male engineers have with women is that they are around them so rarely to practice their skills. But I think people also assume a good job in engineering is an automatic for any graduate, and it isn't.

[DaveinHackensack]

"I have yet to meet a high level executive with an engineering background in any large corporation."

Jack Welsh, the former CEO of a fairly large corporation (GE), has a doctorate in chemical engineering.

[sg]

I think that Half Sigma is right. One of my in laws got a great job straight out of U of Michigan Ann Arbor law school.

[Truth(er)]

"Aside from computer engineers working as computer scientists, I can't think of an examples of engineering majors flooding non-engineering jobs."

Engineering is flooded with foreigners that are either being subsidized by their governments or receiving copious amounts of aid from the US. They stay in advanced programs to qualify eventually for citizenship. Companies are constantly outsourcing. Where are Americans going to get jobs in engineering that are not going to be outsourced?

I don't buy the employment or income statistics since selection bias will only sample the winners, not the losers.

[John Galt]

ronald...if the person is more smart than social, Accounting. If more social than smart, be a Petroleum Landman (Landmen negotiate drilling agreements with landowners, perform title work, may do regulatory work for the government, etc.)

Anything in the O&G industry is risky, but the average age is in the mid-50s, so there will be opportunity and changing of the guard. Side benefit is they may get the chance to co-invest in deals, and they have the chance (especially if they live in out-of-the-way locations) to go on their own.

Re: where do engineers get to run companies...in the oil and gas business, including O&G banking. Most CEOs are either landmen or engineers. You won't get PE money without a good engineer in upper management, and PE is where all the lucrative deals are done. Petro Engineering is also the "whitest" of the disciplines...most of the foreign engineers who study here are planning to go back to whatever petrostate sent them over for training.

[Joe]

In line on the comments on outsourcing work...what are the potential options for someone, who graduating from a Tier 2-4 law school, decides to practice overseas. For instance in Asia there is not as much supply of lawyers as there is in America. How does this translate? Any anecdotes or facts would be useful. Thanks