Bimodal Salary Distribution for New Law School Graduates
nalp.org
nalp.org
The major issue here is the US higher ed system which is massively unproductive and by and large a scam.
You don't need 3-years after your 4-year undergraduate degree to become a lawyer. In the UK, where common law comes from, you simply study law as an undergraduate. You finish at 22 and you're not saddled with massive debt and 3 more years of wasting your working age pursuing useless courses (my 2nd and 3rd year of law school were absolutely useless, while the first year was essential. These courses can be incorporated into undergraduate. Everyone else does it this way and they have high quality lawyers, probably better than ours.
This way if you decide you hate being a lawyer (like many do) or you don't get a job at a firm, your legal education is still valuable for other careers in business, strategy, etc. You're still young and don't have to worry about the three extra years and $200k you spent going to law school.
The other point is some schools have undergraduate degrees that look like law degrees, and could perhaps serve the function with just a little tweaking. [0] [1] You just can't be a lawyer with them.
The whole thing is part a scam by schools (full priced students that can be served in large classes) and also the profession.
The untouched comment is law school was also a socially acceptable way for intelligent but undirected people to defer their choice of occupation for 3 more years.
[0] http://collegecatalog.uchicago.edu/thecollege/lawlettersands...
[1] http://catalog.yale.edu/ycps/subjects-of-instruction/ethics-...
The number of Medical school admissions and future residency positions is pretty well controlled, so this kind of problem doesn't really arise (well, it's complicated but more or less).
On the other hand, any school can spin up a law program and start charging admission, no matter how qualified it is to actually do that. But it's only worthwhile going to law school if you can get into the first tier (Harvard, Yale, Columbia, NYU) or second tier schools. Third and fourth tier are basically a joke. You're throwing your money away. Of course, many people ignore that thinking they'll be different or lucky. And we end up with the kind of issues we see here today.
It's still more complicated, though, because a lot of what people from third and fourth tier schools used to do (sit in giant rooms and review case law for big cases), they are no longer needed for thanks to technology. So the 2000's onward was an awful time to want to be shove yourself through law school hail-mary hoping that just because you're a "lawyer" you'll be OK.
Law schools students got squeezed on both sides, and the pain is real. A profession that used to be much like medicine, where you would do "OK" in life at the very worst is now a commodity product thanks to forces from all sides.
I went to graduate school at a college that had a primarily liberal-arts oriented undergraduate curriculum and I knew a lot of people who graduated with their liberal arts degree and ended up going to law school after finding that their degree wasn't really setting them on the path to a successful career. Not universally of course and a number of my friends did quite well for themselves with just their undergrad degrees but those who did didn't really follow particularly conventional career paths.
So for a reasonable number of people I knew, law school functioned as this sort of default career path for liberal arts undergrads--though a fair number of them didn't stay in the profession long-term.
And a lot of them did, because a successful law school is a license to print money. Tuition is high, and there are no pesky labs or expensive test equipment to maintain.
Similar to lawyers, it would be interesting if instead of relying on Wealthfront and AngelList, engineers at Google, Facebook, Apple, etc started openly contributing their salary information to increase wages to 2-3x that of engineers at less selective employers and create this bi-modal distribution in tech.
[1] http://www.lawfirmstats.com/firms/ [2] https://books.google.com/books?id=IY4ieeVyer4C&pg=PA18&lpg=P... [3] http://www.bizjournals.com/phoenix/stories/1998/10/05/newsco...
It's a very different environment from law firms. Big, prestigious firms can pay first-year associates so much because they can bill them out to corporate clients in a way that the small-town lawyer who handles personal real estate transactions can't. I did some work for one of the well-known NY law firms a while back and the cost of the part of the project I was associated with must have been staggering. I know what I was paid and it was a lot and that was a tiny slice of the entire project.
By contrast, it's not clear to me why more salary transparency at Apple, Google, and Facebook would trigger this bidding war that would cause them to pay so much more than everyone else in the industry. After all, they're already considered desirable employers even with wages that are (I assume) somewhat above market but not ridiculously so.
We know for a fact there was massive market distortion by deliberate employer action; that would arguably have an effect similar to that of massive market failure.
The parent argument was that a different form of what some might also call collusion--publishing salaries in the context of setting the going rate as large law firms apparently do--would instead massively (2-3x) increase salaries at those same firms.
Peter Thiel once said that a diploma is a dunce hat if you don't go to a top school.[1] I'd translate that further and say that if you don't get into one of the top-20 law schools (Phoenix Law instead of Harvard Law), you will most likely end up on the lower paying bimodal hump instead of the higher one.
The "dunce" characterization comes into play because those lower tier law schools are still very expensive and even the unranked schools[2] will still require massive loans to finish.
[1]http://money.cnn.com/2014/09/16/investing/peter-thiel-apple-...
[2]http://www.azsummitlaw.edu/admissions/tuition-and-financial-...
> "Peter Thiel once said that a diploma is a dunce hat if you don't go to a top school."
This is the perfect example of someone who lives in separate reality from most people, and extrapolates his rare experiences to the world at large.
Are there entrepreneurial wunderkinds who can extract more value from real world experience than classroom experience? Some, not many (though most of Thiel's cohorts probably fall in this category). And are there majors and degrees and programs that are more likely to result in underemployment or a poor debt-to-earnings ratio? Sure, some.
But the vast majority of people earn significantly more and enjoy a higher standard of living simply by virtue of having a degree. In addition to the financial benefit, many people value the experience of their time spent in college.
Thiel seems entirely disconnected from the reality of most people. That's ok, it's understandable. But calling people dunces for making rational choices given their personal circumstances makes him come off like a total asshat.
> This is the perfect example of someone who lives in
> separate reality from most people, and extrapolates his
> rare experiences to the world at large.
You're comparing a desirable degree vs. a low-tier degree in the context of your company and hiring process. That might mean the world to you, but it's irrelevant to determining whether a low-tier degree has value.
Compare low-tier graduates to non-graduates in the economy at large. People holding no degree are vastly more likely to be unemployed or hold a minimum wage, manual labor job. People holding a degree (even a lower tier degree), are much more likely than the no-degree group to have a more desirable job that pays relatively well.
There may be many factors explaining why this disparity exists. But certainly one reason is that many companies currently require an applicant have a college degree even for non-desirable entry-level jobs. If you don't have a degree, you're not even getting your foot in the door. This practice probably makes little sense, but it's the way things currently are, and why holding a low-tier degree is much better than the alternative of holding no degree for most people.
A generation ago you could get these jobs straight from high school, but that's not the way it is today.
[0] http://www.economist.com/news/business/21636751-why-big-end-...
There are a handful of firms that beat the market scale, but even more firms that pay less than market (mostly through below-market bonuses, rather than through below-market salaries).
First-year partners aren't likely to make 1MM+, but rather something in the range of 300k-700k (http://www.quora.com/What-does-the-average-junior-partner-at...). Average compensation of all partners in 2012 was 681k (http://abovethelaw.com/2012/09/new-data-on-law-firm-partner-...).
From an economic perspective, you can imagine that a lawyer can typically bill 2000 hours per year. If the lawyer's salary + benefits + retirement contribution is 150k per year, they would need $75 per hour to cover this cost. Since the lawyer is working for a big firm which has high overhead costs and a goal of returning profit to their partners, the amount that they bill typically 3X their hourly salary (3X $75 = $225). This is why it is so expensive to hire an attorney. For large corporations, this fee is reasonable since they have millions of dollars at stake in an M&A transaction, IPO deal, or patent litigation. For regular working folks, this is often unaffordable. Due to the bifurcation of the potential clients (big business vs. everyone else), there is also a bifurcation on attorney salaries.
You can either go to law school (or business school) immediately after finishing your bachelor's degree, or you can go back to school after 5 or so years in the work force. If you have no professional full-time experience, nobody is going to pay you more than $60k or $70k because it will take a few years for you to become a moderately productive employee. You're really no more useful than someone right out of undergrad. But if you have an advanced degree and a few years of proven job experience, you can hit the ground running and as such, employers often pay $150k+.
I bet if you were able to plot salaries and full-time experience on a graph, this would become obvious. That's my hypothesis, anyway.
Getting into big law has little to do with prior experience. It's much more correlated with law school, but I know people who went to second rate schools who got offers to prestigious big law firms. I believe about 25% of employed new graduates go into big law.
Investment banks are a different world; they're basically an apprenticeship business where no amount of experience doing anything else can teach you how to do the job. They have been taking far fewer MBAs in recent year.
I agree that 3-4 years of work experience really helps during the MBA. 6 is too much though (my case) because partying till 5am becomes a lot harder when you're 30 and all your classmates are 26.