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."

Comments

[anon]

By the way Corey, the stuff you talk about exists society wide. The Gini coefficient, a number you're probably already familiar with, tries to measure this. Looking at a map, it's amazing to see how poorly some countries distribute their wealth. Sadly, the US is moving more and more towards the dysfunctional orange countries. Its Gini coefficient went from 0.35 to 0.45 between 1980 and 2005.
http://en.wikipedia.org/wiki/Gini_coefficient#Income_Gini_coefficients_in_the_world
P.S. I wonder what the Gini coefficient would be for starting lawyer salaries!

[anon]

Good post Corey. It's nice to find a good wave during a random internet surf.

[Corey]

Of course the fact that hard work and fundamentals do not guarantee success should not stop us from working hard on fundamentals. (Presuming of course that the fundamentals of success are singularily definable.)

My thinking was, if we really do want to flatten/push together this graph curve, then there needs to be less difference in "qualifications" between students at a given school or between schools. Much of what passes for "qualification" in law is based merely on perception of rank hierarchy status. To a very large degree, thinking makes this graph so.

So in choosing a new thinking to promote, we could go with rugged individualism. But ultimately that mythology leads right back into pre-ordained meritocracy by offering such a powerful self-justification for differences in outcomes. (i.e. "I worked harder/better than you did.")

Instead, I think we need to focus on cooperation and academic community. It should be everyone's failure when someone is left behind in law school. People need to have conversations across that gap in the graph. We should look at why there are only two kinds of legal work, grossly underpaid and grossly overpaid. What larger disparities in society are getting reflected on law and what egalitarian duties lawyers have re: each other and the world.

I guess I would change #4 from "Try your best" to "Give and accept help." Understanding how much my $160K job depends on the contributions of all my friends to my education makes it impossible for me to be self-satisfied in it while they continue to struggle. That motivates me to try and change things so much more than would believing I am just 4 times smarter/more valuable than people in the other graph mode.

[Bill Henderson]

Corey,

These are terrific observations. But re Buffet's advice, I am amazed by how often the basic fundamentals of success are overlooked--law students certainly being no exception. So the people who take the lessons to heart will (in my opinion) be better off.

The fact that Horatio Alger story cannot be true for everyone is not a reason to backoff. Rather, it is the tendency to be impressed by our own cleverness, and hence backoff the "myth", that creates the opportunity. I could refrain this in terms of cognitive biases, but you get the point.

Your point the persistence of elitist is undoubtedly correct. bh.

[Corey]

It would be very tempting to believe that I succeeded in law school by following the Buffet advice quoted above, because then it would be about my good character rather than blind luck. The advice is great and promotes the good life, but in the context given it also suggestively invokes the Horatio Alger myth. It is Buffet justifying his riches by implying a fable about their humble obtain.

The cynical question posed by this graph is exactly how many personalized success stories must a law school facilitate and post on their recruitment website to counteract the bad word of mouth from those struggling in the lower mode of the graph.

I think that those who predict a sea-change in law schools are underestimating the power of marketing. They might benefit from driving down to the local Speedway station and watching single mothers line up to buy lottery tickets while their children eat nothing but free school breakfast and lunch each day. A one in 170,000,000 shot valued more than a book for their kid.

I lived smack in the middle of the late 90s tech boom, working 80 hour weeks and remarking along with everyone else that "this insanity can't go on." There were Bi-Modal distributions all over the place, even within single companies, and all the workers understood statistics better than most lawyers. But you know what, everyone looks at the upper mode, then, now, and forever.

It is human nature to see ourselves as eligible for success, to overestimate our chances of hitting the top outcome. And that can be a good thing, because it motivates human striving. Or, like any cognitive bias, it can be manipulated for profit.

I find it massively disturbing that the seeming fantasy solution of many commentators here is a consolidation in the number of law schools. You can't fix an elitism backed bimodal distribution simply by denying access to the ugly lower mode until it goes away.

[Jeff Yates]

(cross posted on Voir Dire) This discussion made me wonder - is it possible that a similar employment prospects gap or bi-modal distribution exists (albeit in a different form) in academic careers, such as political science (or history, english, etc.). If we are thinking about placing “in field,” i.e. as a professor in the discipline, then Ph.D. programs may have an analogous distribution of opportunity. More thoughts on this below the fold…

Granted, I’m just musing here based on experience and observations, but let’s think about this possibility. The right mode on Bill’s original chart would denote higher paying, lower course load, higher resources tenure track jobs at research institutions (or possibly prestigious liberal arts schools). In other words, salary is supplanted somewhat by prestige of institution, research opportunities and resources. The left mode of the chart would be comprised of lower paying, higher teaching load, lower research resources positions such as non-tenure track gigs, community college positions and less prestigious teaching schools.

Now, let me go ahead and answer an obvious criticism of my analogy - “You’re examples suggest an arbitrary ‘goodness’ of research schools; many people select into teaching oriented schools.” Yes, this is true, but people also self-select into government jobs, small firms, public defender positions and other lower paying legal positions. In this way the phenomenon is constant across the law salary and academic opportunity situations. Now, what drives the distributions? Much like with the law salary situation, academic opportunities can be divided into two camps - elite school grads have a very high probability of placing in the right mode (assuming that they want to do so) and a very small percentage of non-elite grads will also place in the right mode (maybe 5-15% depending on your definition of non-elite grad). The left mode is made up primarily of non-elite grads and some elite grads that self select into it or fall into it for some other reason. Of course, the lay out of effort and lost opportunities while in grad school (and more often than you might think large loans debt) are constant although the opportunities are not. In this sense, there may be some common ground for analyzing investments in higher education degrees across disciplines (e.g. law and social sciences) although I’m sure that someone will be happy to correct me.

[cjt]

I went to Tulane and luckily got a fed clerkship and will likely (I hope!) not have a hard time finding a BigLaw LLP job once I decide to start looking for a job (in Jan 08).

While Tulane is nice, it's not enough "nice" enough in the sense that we do not get jobs solely based on name of our school (although it carries some weight; but no one there kids themselves, we all lamented our waitlisting at Top 15 schools). We send kids to the best legal jobs, but there are also kids who struggle mightily. And with a *ton* of law school debt. Not a pretty picture.

In any event, I'm not even really sure I want to be a lawyer; everyone who has done BigLaw LLP seems to think it is miserable. Soul sucking, etc. Anyways, I think that Mataser is right and legal education is going to change significantly in the near future. I think the same will happen with the legal profession (see Turow's ABA journal article).

[Tina]

Law School: Washburn, top 20% of class.
Master of Tax: UMKC
1st job - year 1: 2001, JD, working on LLM in tax:
Law Clerk, State Board of tax appeals. $8.60 per hour, no benefits

2nd job - year 2-3: JD, LLM small firm, pop. 100K midwestern college town, fee split general practice, netted $27,000 in last year of 3 years of employment (high year).

3rd job - year 4-5: Contractor, large corporation transactions dept., Kansas City, leasing negotiation,other acquisitions,$22 per hour, no benefits.

4th job - year 6: Small boutique real estate and tax firm in Kansas City, salary $42,000, 1900 billables required, almost no staff support, health & dental paid.

Frankly, I wish I had just started selling life insurance in 1997 when I started law school.

[Bill Henderson]

Warren and Susan Buffett told their grandkids the best advice I have heard.
1. Show up
2. Tell the truth
3. Pay attention
4. Try your best
5. Let go of outcomes.

Too many law students worry and gossip rather than focusing on being the best law student and professional they can be (i.e., 1-4). Follow this advice. If you do, you will exponentially increase your odds of a good outcome, making #5 much easier.

[freaked out student]

As a 1L, what am I to do about all this? Just hope for the best?

[Bill Henderson]

Loyola 2L,

Being a law school dean is a very hard job because of the disparate constituencies involved. It takes a lot of leadership skill to get faculty to focus on economic realities of students; a safe strategy is to agree with faculty that a rise in academic reputation via scholarship will raise all ships. Of course, this strategy cannot work for all law schools.

Fortunately, a few people like Rick Matasar are beginning to think through a new paradigm. We need one.

[Loyola 2L]

Interesting that Dean Matasar has paid so much thoughtful attention to this problem. I wish I could say the same about my school. Our Deans seem to be focused on everything but our futures. They're ready to explode with opinions on political and social issues, but mention your future and they pretend they didn't hear you. If you persist they roll their eyes, sigh, and find other catty ways to dismiss you and your concerns. In my opinion, you should at least pretend to care about your students' futures.