The Wall Street Journal reports:
A law degree isn't necessarily a license to print money these days.
For graduates of elite law schools, prospects have never been better. Big law firms this year boosted their starting salaries to as high as $160,000. But the majority of law-school graduates are suffering from a supply-and-demand imbalance that's suppressing pay and job growth. The result: Graduates who don't score at the top of their class are struggling to find well-paying jobs to make payments on law-school debts that can exceed $100,000. Some are taking temporary contract work, reviewing documents for as little as $20 an hour, without benefits. And many are blaming their law schools for failing to warn them about the dark side of the job market.
The law degree that Scott Bullock gained in 2005 from Seton Hall University -- where he says he ranked in the top third of his class -- is a "waste," he says. Some former high-school friends are earning considerably more as plumbers and electricians than the $50,000-a-year Mr. Bullock is making as a personal-injury attorney in Manhattan. To boot, he is paying off $118,000 in law-school debt.
"Unfortunately, some find the practice of law is not for them," Seton Hall's associate dean, Kathleen Boozang, said through a spokeswoman. "However, it is our experience that a legal education is a tremendous asset for a variety of professional paths."
A slack in demand appears to be part of the problem. The legal sector, after more than tripling in inflation-adjusted growth between 1970 and 1987, has grown at an average annual inflation-adjusted rate of 1.2% since 1988, or less than half as fast as the broader economy, according to Commerce Department data.
Join a discussion on the state of the legal market.
Some practice areas have declined in recent years: Personal-injury and medical-malpractice cases have been undercut by state laws limiting class-action suits, out-of-state plaintiffs and payouts on damages. Securities class-action litigation has declined in part because of a buoyant stock market.
On the supply end, more lawyers are entering the work force, thanks in part to the accreditation of new law schools and an influx of applicants after the dot-com implosion earlier this decade. In the 2005-06 academic year, 43,883 Juris Doctor degrees were awarded, up from 37,909 for 2001-02, according to the American Bar Association. Universities are starting up more law schools in part for prestige but also because they are money makers. Costs are low compared with other graduate schools and classrooms can be large. Since 1995, the number of ABA-accredited schools increased by 11%, to 196.
Evidence of a squeezed market among the majority of private lawyers in the U.S., who work as sole practitioners or at small firms, is growing. A survey of about 650 Chicago lawyers published in the 2005 book "Urban Lawyers" found that between 1975 and 1995 the inflation-adjusted average income of the top 25% of earners, generally big-firm lawyers, grew by 22% -- while income for the other 75% actually dropped.
According to the Internal Revenue Service, the inflation-adjusted average income of sole practitioners has been flat since the mid-1980s. A recent survey showed that out of nearly 600 lawyers at firms of 10 lawyers or fewer in Indiana, wages for the majority only kept pace with inflation or dropped in real terms over the past five years.
The news isn't any better for the 14% of new lawyers who go into government or join public-interest firms. Inflation-adjusted starting salaries for graduates who go to work for public-interest firms or the government rose 4% and 8.6%, respectively, between 1994 and 2006, according to the National Association for Law Placement, which aggregates graduate surveys from law schools. That compares with at least an 11% jump in the median family income during the same period, according to the Census Bureau. Graduates who become in-house company lawyers, about 9%, have fared better: Their salaries rose by nearly 14% during the same period.
Many students "simply cannot earn enough income after graduation to support the debt they incur," wrote Richard Matasar, dean of New York Law School, in 2005, concluding that, "We may be reaching the end of a golden era for law schools."
You might say the law of diminishing returns has kicked in.The government doesn't need to subsidize excess number of lawyers.But,get this quote from the Wall Street Journal:
Students entering law school have little way of knowing how tight a job market they might face. The only employment data that many prospective students see comes from school-promoted surveys that provide a far-from-complete portrait of graduate experiences. Tulane University, for example, reports to U.S. News & World Report magazine, which publishes widely watched annual law-school rankings, that its law-school graduates entering the job market in 2005 had a median salary of $135,000. But that is based on a survey that only 24% of that year's graduates completed, and those who did so likely represent the cream of the class, a Tulane official concedes.
You might wonder whether the US News and World Report survey on salaries is the most worthless survey around.Via
Instapundit.
