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 in NALP's sample (over half of all 2008 graduates), a remarkable 23% (5,130 '08 grads) 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 starting 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.