Empirical Legal Studies

Postscript on the Bi-Modal Distribution

We got a lot of traffic last week due to our post on the bi-modal salary distribution.   Many readers observed that Class of 2006 non-respondents are probably disproportionately lower earners because (a) they are reluctant to divulge embarrassing information, perhaps because they blame themselves, and (b) law schools are not particularly anxious to get salary information that will pull down their averages.   So, as bleak as the picture looks, it may be even worst.  I think this is a reasonable interpretative point.

Richard Matasar, the Dean at New York Law School (and author of the terrific essay "The Rise and Fall of the American Legal Education"), has an even better vantage point to evaluate these issues.  In an email exchange, Richard made the following observations [which he permitted me to post]:

The problem you highlight is significantly understated by two additional things.  First, the debt loads for the students in the two parts of the distribution are nearly identical and depending on how "merit" money is distributed, the debt may actually be higher for those in the bottom of the salary pool. [This is because at each school, higher credentialed students are more likely to (a) get merit aid, and (b) get the grades necessary to get a large firm job.  WDH]. 

Second, NALP also has longer term data that reveal that the gap widens over time.  This is confirmed in part by the [After the JD Study] that talks about initial difference, ties it to schools, and then looks out over time.  And, as you know, the distribution looks similar at schools throughout the hierarchy outside of a very small group at the top [i.e., national law schools, which will likely have a single mode that is very high, such as $160K].

This is serious stuff.  In Rise and Fall, Matasar observed that "we may be reaching the end of a golden era for law schools, beginning a period of decline, and putting many schools' survival at risk."

The Empirics of Taking the Stand in Criminal Cases

Two of my esteemed Cornell Law School colleagues (and, in the interest of full disclosure, very good friends as well), Ted Eisenberg and Valerie Hans, recently circulated a paper that will likely interest, among others, criminal proceduralists.  In Taking a Stand on Taking the Stand: The Effect of a Prior Criminal Record on the Decision to Testify and On Trial Outcomes, Ted and Valerie exploit a wonderful dataset and assess "relations between the existence of a prior criminal record and defendants testifying at trial, between testifying at trial and juries' learning about a criminal record, and between juries' learning about a criminal record and their decisions to convict or acquit." A summary of their findings, drawn from their abstract, follows.

"For cases with strong evidence against defendants, learning of criminal records is not strongly associated with conviction rates. Juries appear to rely on criminal records to convict when other evidence in the case normally would not support conviction. Use of prior record evidence may therefore lead to erroneous convictions."

APSA Award

I would like to congratulate our own Sara Benesh, who received the 2007 Houghton-Mifflin award from the "Law and Courts" section of the American Political Science Association for her paper entitled "Understanding Public Confidence in American Courts."  According to the guidelines, The Houghton-Mifflin Award recognizes the best journal article on law and courts written by a political scientist and published during the previous calendar year.  The piece was published in the August 2006 issue of the Journal of Politics.  Congratulations Sara.

Hat Tip: Jeff Yates of Voir Dire (see post here)

Distribution of 2006 Starting Salaries: Best Graphic Chart of the Year

The most recent edition of NALP's serial publication,  Jobs & JD's, includes the chart excerpted below [click-on to enlarge].  It is the distribution of full-time salaries for all members of the Class of 2006 who reported income data to their respective law school (22,665 graduates).  If you were looking for a single graphic to illustrate the most vexing problems facing law firms, law students, and law schools, this would be it.  A more dramatic bimodal distribution you will not find.

The sample includes--in order of size--private practice (55.8%), business (14.2%), government (10.6%), judicial clerks (9.6%), public interest (5.4%), and other (2.8%).  Half of the graduates make less than the $62,000 per year median--but remarkably, there is no clustering there.  Over a quarter (27.5%) make between $40k-$55k per year, and another quarter (27.8%) have an annual salary of $100K plus.   

If the chart were a flipbook of the last twenty years, the first mode would be relatively stationary, barely tracking inflation, while the second mode would be moving quickly to the right--i.e., the salary wars.  In fact, because of the recent jump to $160K in the major markets, the second mode has already moved even more to the right.

What are the implications of this chart?

• For law students. Let's face it:  $40K to $55K per year is just not enough to pay down the avg. $85,000 debt (especially as interest rates climb) and still enjoy any kind of lifestyle that a professional degree is presumed to confer. The national median starting salary for a 2 to 10 lawyer firm is $50,000.   There are a lot of struggling alumni out there. And do we really need more law schools?  For many, getting a JD is a very risky financial proposition, especially when you factor in bar passage.

• For law schools.  Because different law schools supply graduates into different modes (roughly tracking US News rank), it is indisputable that lower-ranked schools cannot continue to heap ever higher debt onto their students.  On the other hand, if you are Georgetown, NYU, Northwestern, Harvard, Columbia, et al., your current model works just fine.  The salary wars make this possible.    Yet, 50 to 75 other law schools raising tuition in order to buy their way into the Top 15 is a classic positional competition--and it is socially harmful, with our students bearing the cost.  As legal educators, we can do better.

• For law firms. The second mode keep moving to the right because too many law firms refuse to reconsider their business model in light of a continuing surge in demand for corporate legal services.   All these firms want Harvard, Columbia, Chicago graduates, etc. and, if necessary, Illinois (top 25%),  Indiana (top 15%), Marquette (top 10%), etc.  If legal education worked like any other market, Northwestern would be merging with Cardozo, exploiting Cardozo's capacity and location and leveraging Northwestern's brand.  But law schools are maximizing prestige, not output or profit.  Such a merger would be dilutive or break-even at best for the higher ranked school.

There is a lot of commodity corporate legal work on there; why not bow out of the salary wars, ratchet down the hours to 1800, take work on a flat fee arrangement, focus on better/faster service (thus increasing margins on the flat fees), and literally feast on the human capital willing to take a job in the "death valley" range (i.e., ~$80,000 per year), especially if the hours are sane.  The client gets quality and cost predictability, and the well-managed firm can make a lot of money.  This is a great opportunity for a firm willing to rethink its business model. Larry Ribstein's publicly held law firm would be all over this. But any established large firm willing to think outside the box could do it.

Challenges To (or Perils of) Empirical Research

Over at MoneyLaw Jeff Harrison (Florida) shares some of the challenges incident to his desire to study, empirically, "the scholarly productivity of graduates of elite schools with that of graduates of non elite schools." If nothing else, his musings perhaps remind us anew that, in the world of empirical legal scholarship, precious little comes easily.