A Case of Supply v. Demand
Law schools are manufacturing more lawyers than America needs, and law students aren't happy about it.
But what of those high salaries for the lawyers who do get jobs? After all, big law schools report that the average graduate is still making in the high five figures for entry-level work. The problem is those statistics are what lawyers might call hearsay. For one, law schools report their own salary-at-graduation data to organizations like NALP and magazines like U.S. News and World Report, collecting it from student surveys. But, NALP notes, there is an obvious bias problem. Students don't bother telling their law school what they are making unless they are making a lot. So the figure is probably too high, and either way is not a scientific measure.
Another point is that prospective law students usually look at average pay at graduation. But the average hides substantial inequality: There are the jobs at white-shoe firms that pay about $160,000 per year to recent graduates, and then there are the rest of jobs, which generally pay between $45,000 and $60,000. Almost no salaries are near the median or the average. They are clustered at the bottom, with fewer high earners, many of whom come from a handful of super-elite law schools, up at the top. That means that most students do not meet the break-even salary—the starting salary that would make law school tuition a good investment, estimated at around $65,000.
Students simply "cannot earn enough income after graduation to support the debt they incur," wrote Richard Matasar, the dean of New York Law School, in 2005. "Even those making the highest salaries find that the debt that they have accumulated while in school may tax them for years."
Still, the harsh realities of being a young lawyer have not stopped thousands from enrolling in law school during the recession. Veritas Prep, a graduate school admissions consulting firm, found in a recent survey that four in five prospective applicants still plan to apply to law school even if "a significant number of law school graduates were unable to find jobs in their desired fields." Only 4 percent were dissuaded.
So does that just mean a continued oversupply of lawyers, dragging down their own median salaries and dealing with their heavy debt burdens while a few lucky associates make it to the corporate big leagues? Not necessarily.
David McGowan of University of San Diego and Bernard Burk of the Center for Corporate Governance at Stanford argue that trend cannot continue. Prospective students will recognize that law school can be a bad deal, and one way or another is not a sure thing. Applications will slowly drop off. The marquee law schools will be fine. But some of the newer, lower-ranked law schools will end up shutting down—meaning fewer lawyers, and the vindication, if not the employment, of all of those scam-blog authors.
Annie Lowrey, formerly Slate’s Moneybox columnist, is economic policy reporter for the New York Times.
Photograph of student studying by Jupiterimages/Thinkstock.