July 24, 2017

How unemployment at graduation affects lawyer earnings over time

More factual analysis from McIntyre & Simkovic, forthcoming in Journal of Empirical Legal Studies:

We investigate whether economic conditions at labor market entry predict long-term differences in law graduate earnings. We find that unemployment levels at graduation continue to predict law earnings premiums within 4 years after graduation for earners at the high end and middle of the distribution. However, the relation fades as law graduates gain experience and the difference in lifetime earnings is moderate. This suggests that earnings figures from After the JD II and III -- which track law graduates who passed the bar exam in 2000 -- are likely generalizable to other law cohorts because these studies are outside the window when graduation conditions predict differences in subsequent earnings.

 

Outcomes data available prior to matriculation do not predict unemployment or starting salaries at graduation. Earnings premiums are not predicted by BLS projected job openings.

 

While changes in cohort size predict changes in the percent of law graduates practicing law, we find little evidence that changes in cohort size predict changes in earnings. This suggests that law graduates who switch to other occupations when law cohort sizes increase are not hurt financially by larger cohorts.

 

For medium to high earning graduates, successfully timing law school predicts a higher value of a law degree ex-post, but simulations show that no strategy for ex-ante timing is readily available.

 


July 24, 2017 in Legal Profession, Of Academic Interest | Permalink

July 18, 2017

June LSAT takers up nearly 20% last month compared to 2016

Is California’s bar examination minimum passing score anti-competitive? (Michael Simkovic)

Occupational licensing regimes can help markets function when those markets suffer from what Economist George Akerlof coined a “lemons” problem.  In a lemons market, it is too costly or difficult for consumers to distinguish goods or services of acceptable quality from those that are close to worthless or even harmful.  Licensing regimes can help solve this problem by assuring consumers of a minimal baseline level of quality.  Effectively, licensing removes the bottom of the market, increasing quality, consumer confidence, volume, and price.

But economists worry that licensing regimes could be abused.  For example, if members of a licensed occupation were to seize control of licensing, they might set unnecessarily high barriers to entry for their industry, above what is optimal for consumer protection.  This could create an artificial shortage, reduce competition, drive up prices and drive down quality of services.  Political leaders also worry that excessive state or local licensing regimes could deprive workers of valuable economic opportunities and reduce their geographic mobility.

The deans of almost all ABA approved California law schools have jointly expressed concerns that California’s minimum passing score (‘cut score’) on the nationally uniform, multiple choice, Multi-State Bar Exam bar examination is excessively high. 

These leaders of legal education note that California has a higher cut score than any state except Delaware, no justification has been provided for this unusually high cut score, and some parts of California may have a shortage of lawyers.  Moreover, although law graduates from California score better on the MBE than the national average, they are less likely to pass the bar exam because of California’s unusually high cut score.  The case for bringing California’s cut score into line with those of other leading legal jurisdictions such as New York has been most forcefully stated by UC-Hastings Dean David Faigman. 

Amid concerns about possible anti-trust lawsuits against the State Bar, the Supreme Court of California has agreed to supervise the state bar of California and may set a lower bar cut score.

High cut scores are not the only signs of possible anti-competitive protectionism in California. California is among the few states that, without exception, forces experienced attorneys licensed in other states to sit for reexamination prior to relicensing. The overwhelming majority of jurisdictions—including New York, Washington D.C., Illinois, Texas, and Massachusetts—permit experienced lawyers who are licensed in another state to obtain a license to practice law on motion, without the need for reexamination.  (Some impose additional requirements, such as graduation from an ABA-approved law school or reciprocity by the state of origin).

Data from the U.S. Bureau of Labor Statistics, Occupational Employment Statistics[i] shows that California lawyers earn more, on average, than lawyers in any jurisdiction except Washington D.C. 


2016 BLS mean lawyer earnings by state

Top paying States for Lawyers:

State

Employment

Employment per thousand jobs

Location quotient[ii]

Hourly mean wage

Annual mean wage 

District of Columbia

31,470

44.81

10.16

$87.89

$182,810

California

76,840

4.81

1.09

$77.89

$162,010

New York

72,760

8.00

1.81

$77.53

$161,260

Massachusetts

17,440

5.04

1.14

$76.33

$158,760

Delaware

2,590

5.87

1.33

$75.77

$157,610

While this may be great for lawyers, it is not necessarily an unmitigated good.  It means that legal services likely cost clients more and may be less widely available. 

Continue reading


July 18, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest | Permalink

July 17, 2017

Some corrected data on trends in law school applications and LSAT scores

Here.  The problem is that the Blog Emperor relies too often on unreliable sources like "Law School Transparency" and the hopeless Matt Leichter.


July 17, 2017 in Legal Profession, Of Academic Interest | Permalink

July 05, 2017

Wall Street Journal trims legal coverage (Michael Simkovic)

The Wall Street Journal closed several of its blogs on Monday, including its Law Blog.  The WSJ has maintained its blogs with broader readership, such as those about economics and personal finance.  


July 5, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest, Weblogs | Permalink

June 12, 2017

Applicants down half of one percent in 2016-17 cycle...

...while the drop in high-end LSAT scores is steeper.

I'll be on a reduced blogging schedule for the summer (look for one or two items per week), but will update the lateral moves list periodically as well as start the new one in August.  (Mike Simkovic, who has posting privileges here as well, may be posting as well in the summer.)

Thanks for reading, and I wish everyone a productive and pleasant summer.


June 12, 2017 in Legal Profession, Of Academic Interest, Rankings | Permalink

May 05, 2017

Law school transfer market 2016

Striking data.  A lot, but not all, of this is motivated by attempts to game the USNEWS rankings.


May 5, 2017 in Legal Profession, Of Academic Interest, Rankings | Permalink

April 27, 2017

Ignorant bloviating about Whittier

I could not agree more with Northwestern Dean Dan Rodriguez:

Whittier's sudden closing is obviously a tough thing for current students and faculty.  Perhaps the decision will be unraveled in the face of public pressure or via littigation.  Yet there seems precious little basis to jump into a matter whose complex issues are essentially private, despite the efforts of many in and around the school to make this into a public spectacle.  Perhaps bloggers should neither aid nor abet these efforts.

The hubris of the unknowing. 

Sometimes Stephen Diamond (Santa Clara) has been a voice of reason amidst the mindless blather about law schools in most of cyberspace (and I have linked to him on a number of occasions over the years), but here he has completely missed the boat:  the general legal market has been improving, true, but it is hardly mysterious why an institution would close a law school where far fewer than half the graduates even pass the bar.  Diamond just politely ignores all the relevant facts about how this school's graduates have been faring, and, of course, is ignorant of the actual finances of the school.

But far more egregious is the presumptuous intervention of Robert Anderson, Associate Professor of Law at Pepperdine.  Faculty members at Whittier are going to lose their jobs, and some may never work again as law teachers or work again at all.  Yet Anderson has the audacity to scold them for not having taken an early retirement in the financial interest of the school.   Seriously?  Does Prof. Anderson pay the bills for any members of that faculty, does he know about their college-age children or their elderly parents or their chronic medical conditions that require a salary and a health insurance plan?  Does he know that a job is not just a paycheck for many people (maybe not Robert Anderson), but a focal point of purpose and meaning in a life?  Does he know that many did take early retirement a few years ago, and that others might have quite reasonably believed that the school's fortunes, now that both its faculty and student body were smaller, would rebound?

I'm sure Anderson doesn't know any of these things, he's just another blogging blowhard who has decided to use someone else's misery as an opportunity to attract some attention to himself.  Anderson is guilty of far worse than unknowing hubris.

UPDATE:  Some choice quotes from Prof. Anderson's posts:

"The reason Whittier is closing is because of intransigent, highly paid, unproductive law professors hang around for decades even when they haven't published anything or updated their courses since they were doing the Macarena."

 

"The unfortunate truth of this story [about Whitter] is that none of this needed to happen..... The number of retirement-age faculty was (and is) enormous, likely larger than it has ever been. If faculties had looked beyond their own personal financial self interest they could have easily contracted to meet the market demand and avoided the disastrous effects that have afflicted law students and now law schools. Sadly, the very faculty members whose institution provided them an outrageously rewarding career over many decades seemed the least likely to 'pay it forward' by helping to reduce expenses....Thus, the story of Whittier is a story of generational wealth shifting that is seen throughout tuition dependent law schools, and indeed throughout our country."


April 27, 2017 in Law in Cyberspace, Law Professors Saying Dumb Things, Legal Profession, Of Academic Interest, Professional Advice | Permalink

April 24, 2017

Ousted Cincinnati Law Dean Jennifer Bard sues the university and the interim Provost

Blog Emperor Caron, who used to teach at Cincinnatti, has the complaint.


April 24, 2017 in Faculty News, Legal Profession, Of Academic Interest | Permalink

April 23, 2017

How sustainable is elite law firms' competitive advantage? (Michael Simkovic)

Elisabeth de Fontenay at Duke argues that elite law firms' expertise in sophisticated corporate transactions is self-sustaining and resistant to competition.  This is in part because firms with that do the lions share of negotiation and drafting for specific kinds of transactions create, manage and retain private information about the current market for terms.


April 23, 2017 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest | Permalink