Monday, April 29, 2013

Today's Supply-Demand Gap in Legal Jobs: Understanding the Reported Numbers

Yesterday, I posted about the supply and demand for legal services some time in the future as more Baby Boomers retire.  Today, I want to explore the supply-demand gap existing today.

Just recently, the ABA released data on employment rates for law school grads nine months after graduation for all ABA-approved law schools.  On average, for 2012 grads, 56.2 percent of grads found long-term, full-time positions that required bar passage.  These jobs include solo practitioners, law firm positions, business and industry positions, government jobs, public interest jobs, clerkships, and jobs in legal education.

In 2011, fewer grads found that type of employment -- just 54.9 percent.  Grads who reported they still sought employment increased a bit from 9.2 percent in 2011 to 10.6 percent in 2012. ABA 2012 Law Graduate Employment Data -- All Schools

This measure of employment success is narrow, but admittedly reflects the aspirations of most students seeking a law degree.  It does not consider the other options that might exist for new grads, including:
  • Employed -- J.D. Advantage
  • Employed -- Professional Position
  • Employed -- Non-Professional Position
  • Employed -- Undetermined
  • Pursuing Graduate Degree Full Time
  • Unemployed -- Start Date Deferred
  • Unemployed -- Not Seeking
  • Employment Status Unknown
The employment number is tricky in another way.  It took me a while to understand the various numbers floating about in the media.  So, here is my understanding of the source of the different employment percentage rates reported by the press. This discussion is my own and should not be considered a statement from my law school.  Are we clear about that?!

The raw data yields at least three different numbers depending on the numerators and denominators used to calculate any employment percentage.

The most reliable number comes from the responses to the survey distributed through the Association for Legal Career Professionals.  See here for more information about NALP.  This very detailed survey captures far more information than does the ABA report most widely available in the press.  ABA Employment Summary for 2012 Graduates by School  The NALP survey report calculates employment rates using a numerator consisting of all categories of employed grads and a denominator consisting only of the number of grads responding to the survey.

Accordingly, for ASL 2011 grads, 75.3 percent were employed, reflecting 55 employed grads out of 73 reporting.  Nineteen ASL grads, or almost 21 percent of our total grads (92) that year failed to respond to the NALP employment survey despite the strenuous efforts of our Career Services Office.

Why does that matter?  Because the ABA then requires law schools to condense the NALP data into its own ABA report.  But, that ABA report does not disclose the number of grads who failed to respond to the NALP survey.  Thus, anyone using this much more ubiquitous report will likely put the number of employed grads as a numerator over a denominator consisting of all grads in that class.  In doing so, it treats the students who failed to reply to the survey as unemployed, whether true or not.

As a result, the employment number for ASL for 2011 falls from 75.3 percent to about 57 percent.  This drop also reflects some differences in the numbers reported:  only 52 employed students and only 91 grads.  For 2012, the ASL number rose to 69 percent (63 employed students/91 grads in the class).

The third number that most frequently circulates in the press, and the one mentioned in the first paragraph of this blog, takes a sub-set of the total grads employed -- specifically those in the "full-time, long-term, bar passage required" category -- and puts that subtotal over a denominator consisting of all grads in that graduating class, including those who did not return the NALP survey.  So again, grads who failed to report get treated as if they had not found any type of job.

For ASL 2011 grads, this approach drops the employment number from 75.3 percent to a fraction less than 31 percent.  For ASL 2012 grads, that number grows to 38.5 percent.  It reflects a 7.5 percent increase from 2011, but still falls 17.7 percent below the national average for all ABA-approved law schools for this specific category of employment.  Several law schools with student profiles similar to ASL's student profile reported lower (or equal) employment numbers, including Ave Maria, Barry, Charlotte, Florida Coastal, North Carolina Central, and Thomas Cooley.    

In short, ASL's employment numbers improved this last year.  Are we doing better in helping students find jobs in this economy?  Or, have more grads responded to the NALP survey so we have fewer non-reporters treated as unemployed in the calculations?  I know our Career Services Office has worked very hard this year on both aspects of this employment picture. 

Which of the three ways to calculate employment rates best represents the job market for law school grads?

ASL students, who must live 2.5 hours from the nearest metropolitan area, have fewer on-campus or pre-graduation opportunities to secure a job within nine months after graduation.  Does that explain the difference between our employment rate and the national average?  How would the employment rates compare 12 months after graduation when our students have settled into the city or town where they plan to practice, have studied for and taken the bar exam, and now have the undivided attention to look more actively for a job?  How would the averages compare after 18 months or two years?

Does a slow start to your law career necessarily counsel against pursuing a career in which attorneys average $100,000 per year in income?  For example, Missouri lawyers earned a median income of between $98,000 and $100,000 in 2010, with one half of responding lawyers reporting higher incomes. See here for the full report.  The Illinois Bar produced a similar report in 2004 showing that the median salary of responding lawyers was $110,000, with half of responding lawyers making more money than that each year.  See Virginia Grant, Highlights of the 2004 ISBA Law Firm Economic Benchmarking Survey, 92 Ill. Bar J. 624 (2004).

Thus, a lawyer, having a 40-year career, making on average a $100,000 year, would earn $4 million over a lifetime.  Women lawyers, unfortunately, average lower incomes than male lawyers, but could still expect to make $50,000 to $75,000 per year over a lifetime. See here for a report on the retention and promotion of women in law firms issued in October 2011.   

And how do law grad employment rates compare to the average employment rates of graduates from other professional and graduate schools in this recessionary market?  I don't know.  Clearly, prospective students need to consider whether they would make more money and be more satisfied with a life spent working in a profession other than law.

I have no regrets about the choice I made to attend law school in 1979.   But, then, I entered the profession during a very different economic time with a more predictable career path in front of me.  At the same time, less than 10 percent of lawyers were women when I graduated in 1982. More on that in a later posting.

October 2014 Update:  For an update and analysis of the date, see here.

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