Saturday, July 10, 2010

Statistics suggest that only 53.8% of all lawyers are employed in the legal profession.

Blogger "A Law School Victim" of the Life's Mockery blog alerted me to Bureau of Labor Statistics stats saying that "Lawyers held about 759,200 jobs in 2008," and that "In May 2008, the average yearly wages for lawyers were $124,750."

I'm a stats wonk, so I thought it might be interesting to combine some of this data with other data and see what conclusions we might be able to draw.  According to the ABA,'s stats, in 2008 the U.S. had 1,162,124 "resident and active attorneys".  Taking the data that I compiled from ABA stats going back to 1963 in my prior post, in the 40 years from 1969 to 2008 the law schools pumped out a total of 1,412,328 attorneys.  (It seems like a reasonable assumption that, on average, a lawyer who graduates at age 25 would want to practice until at least age 65 with some retiring earlier and some retiring later.)

So, using the ABA stats, of those 1,412,328 lawyers produced between 1969 and 2008, only 82.3% bothered to maintain their law licenses in 2008.  I don't know if that data accounts for lawyers with licenses in more than one state; I assume that it does not and simply lists the number of people registered to practice in each state.  It also may not account for 2008 JDs who had not yet taken the Bar Exam.  However, presumably there were more than 43,588 lawyers with licenses in more than one state, meaning that if anything the actual percentage is probably lower than 82.3%.

Using the BLS's number of an estimated 759,200 lawyers (presumably employed as lawyers), only 53.8% were employed in the legal profession.

Given that, it's hard to take the alleged income statistic of $124,750/year seriously because it fails to account for the 46.2% of all lawyers who are not working as lawyers.  That number also fails to tell us about the distribution of income amongst attorneys.  It's thus possible that 20% of those 759,200 employed lawyers might earn very high incomes while the other 80% aren't doing nearly as well.

Another problem with the $124,750/year statistic is that it fails to tell us the distribution amongst lawyers who graduated in different years.  For example, if you graduated in 1975 you may have had a very good chance of building a career that would allow you to earn a high income today.  However, if you graduated in 2005 your chances would be much, much smaller.  What we really need are average income statistics for all JD-holders (not just those actually employed as lawyers) for each graduation year and then stats for graduates in five year groupings.

This reminds me of that stale study which says that going to college allows you to earn $1.X million dollars more than a high school graduate over time yet completely fails to account for the fact that the return on investment of a college degree has decreased every year.  The issue is not whether college graduates from 1950-1990 earned a good return on their investment, which, presumably, is a large percentage of the basis for that stale claim.  Rather the issue is whether that claim holds true today, in which case an examination of the income earned by graduates over the past 10 years would be more insightful.

The Bureau of Labor Statistics page is just one more example of how naive undergraduates do not have good information about the realities of the legal job market.  On the surface it appears as though the average income for a lawyer is $124,750/year.  However, my back-of-the-envelop study suggests that only 53.8% of all lawyers worked as lawyers in 2008.  Furthermore, that income statistic completely fails to account for the distribution of income amongst lawyers and it doesn't tell us about the incomes of graduates over the past decade.

EDIT.  It would be really nice to know or to be able to calculate what percentage of graduates from the past 5, 10, and 20 years were able to find employment in the legal profession.  If the statistics suggest that only 53.8% of all lawyers since 1969 are working as lawyers, then presumably the percentage is much lower for more recent graduates since we can expect that the percentage of older graduates working as lawyers is higher since they entered into a better job market.  It would be insightful if I had sufficient data to be able to plot the percentage of each class that works in the legal profession going back to 1969.  I doubt the data I need exists.

16 comments:

Anonymous said...

The BLS stats play a large role in the misconception surrounding a JD's profit potential.

A lot of people think that the government would have no reason to exaggerate the value of a law degree. But what they don't realize is that if the stats are measured in a wrong way, it doesn't matter how noble the researcher's intent is.

The reality is that many, if not most, law school graduates do not find paid legal employment as an attorney. And the notion that non-legal employers "value" a law degree is BS. Most of them will view the JD as a negative for a variety of reasons.

A law degree actually makes it MORE difficult to obtain a job where only a bachelor's or high school degree is needed.

Lawyers Against The Law School Scam said...

great post. Also do not forget that on my blog I had a post citing a Kiplinger Finance article on Yahoo showing that the average american retires at age 67. The aba says that the average law school grad is about 27 at graduation. So the average lawyer career is about 40 years. So, yes, your post here estimating a 40 year career is about right.

And the 1.4M figure is something that I was planning to calculate, but you beat me to it.

Anonymous said...

Fun fact: In the United States, there are about as many lawyers as there are Walmart employees. http://walmartstores.com/download/2230.pdf

tyson said...

In response to this blog, forgive my cynicism, but so what? The stat is interesting, but completely explainable. First, many, many lawyers retire at age 55 instead of 65. Also, maybe those working in great non-law jobs may not have gotten them if they didn't have a J.D. Maybe some lawyers just lose interest and make a career switch. Maybe the "non-law" jobs have incidental legal components for which a J.D. is prerequisitely "preferred," but not necessarily required. All in all, I think these scenarios, and others like them, would account for the "other 50%." So your blog post, even assuming you are accurate on the numbers analysis, is explainable. Either way, we cannot draw any finite causal explanations for this anomaly. Interesting blog though.

Anonymous said...

Tyson, thanks for the dose of optimism, but please browse some of the blogs/articles first and gain an understanding of the profession. In general a JD is a black mark on your resume to employers outside of the legal sector. After my BigLaw firm collapsed in 2008, I personally sent out 650+ resumes to non-legal employers. FYI, I graduated from a top tier school, have exceptional experience and am very personable. The common misconception was that there was no reason to hire a guy trained with the law when I could easily make the "big bucks" as an attorney. Also, I'd like for you to tell us what jobs would prerequisitely prefer a JD?

A Law School Victim said...

Thank you for following up, you're like the stats guru-breaking down false images of the legal industry one calculation at a time...

Anonymous said...

There's also plenty of attorneys that don't retire at 65 but just keep going, and also most of the current practicing attorneys as well as JD holders in non-legal positions obtained those positions long before this total saturation of the field occurred.

If someone is 47 years old, which is well between the 27 graduation age and 65 retirement age numbers, they must have graduated 20 years ago.

Think about how different the landscape was back then. A college degree was actually an accomplishment. A law degree was obviously much rarer and would be afforded more respect as well. We were in expansion, jobs were actually growing.

It's a completely different landscape now and to compare the prospects of a recent graduate, or a graduate in the future is completely invalid.

There just aren't any jobs now, things have been outsourced and what hasn't is oversaturated. There are too many college graduates in all fields.

Occasionally you hear lemmings complain that the US is "behind" on Science and Math, as if there are jobs for either of those as well. Yeah, if you want to be stuck in a $30k a year job for the rest of your life after 10 years of higher education...but the students are there, the people with qualifications are there...the jobs just aren't.

We have a consumer economy build on smoke and mirrors and credit. The corporations and banks have sold the Americans out, but the American public in general hasn't caught on really or they don't care about their children, or at least other people's children's. The next two generations will be completely different, you will see people stop being materialistic and stop valuing education. Already housing prices have dropped like stones and people are living with their families longer. Humans naturally adapt and do learn by seeing mistakes, and then by following those that saw those mistakes and made adjustments.

Anonymous said...

Oh, yes, a JD may be a serious negative. That's part of the overall problem. If you can't get a law job, and are just trying to do the whole "bootstraps" thing as some of our "survival of the fittest"/Ayn Randie fellow posters are putting out, beware, as the JD ensnares you in trying to find non-legal employment. That's the devil in this whole thing. Non-law employers will be HIGHLY SUSPICIOUS of a JD holder/law licensee applies for a non-law job. I can think of no other degree major which has this wholly negative quality, none.

Drake Mallard said...

I think the general idea that many law grads can't find legal employment is right.

Though, I agree with Tyson that to some extent, there are JDs finding jobs outside of the law firm arena. Whether they are retiring from law firms at a young age, or simply bypassing it altogether from the get-go, it happens.

One of the main side-fields is politics. Not only are the elected representatives themselves often JD-holders, but many of their aides are as well. I know several congressional aides in both Dem and Republican parties who say that having a JD give you a plus for those aide-type jobs. In addition, outside of elected politics, there are various bureaucrats for agencies where a JD is seen as a plus. If you go down to the state and local levels, you will have significant numbers.

That being said, I'm not saying that's enough to close the gap, or even half the gap. I just don't know. But I know it's significant.

Anonymous said...

Drake:

I looked at that myself and thought a JD would be a great idea to get into politics.

However, in practice, it is extremely difficult to break into the field and make a career in politics. There are so many people gunning for the same position. A law degree might help you if you can land one, but it also probably won't.

Many of these positions are also volunteer, you can work your ass off and if your candidate fails, you don't get a job. If the candidate succeeds and doesn't want to give you a job, you're still fucked.

Politics is one of those "connected" fields. Some people succeed here and there, but you can go to Tinseltown and find thousands and thousands of extremely attractive waitresses that are hoping to land their big break, and it probably won't come for most. The difference is though for these people, at least they don't plunk down 6 figures of debt to do it.

I looked into it myself. As for bureaucrats for agencies, LOL, usajobs is pretty much a black hole especially if you don't have the exp (i.e., you are "just" a JD without years of experience) and state governments are not only not hiring, they are actively laying people off. A lot of states are the verge of bankruptcy.

I spoke to some (apparently honest) elected officials at various levels. They told me the best thing to do is to get a good job first. Then after a few years of that you can move into politics.

It is all but impossible to skip that step. Politics is rarely a first career for people. A JD helping for politics is the same as saying a JD helps land higher level executive positions in the corporate world---you are confusing correlation for causation. What happened is a lot of these people had the connections in place and had great jobs before hand, then chose to go the law route to improve their credentials. Law students in this boat artificially skew results. I am certain the law schools know this.

Drake Mallard said...

Anon at 7:11

I agree that it is very hard to get these politics/bureaucrat jobs.

My impression is that while it is not easy to get the congressional aide type jobs, it is also not something that's impossible to do without connections. As for volunteering, to my knowledge, the people I know who are aides make decent money. I'm sure at some point they didn't though.

To your point about JDs in elected office and bureaucrat type positions having had experience in law firms first, I also agree with that. Though, I still think that matters because when these types of JDs go for their second careers, they free up spaces in the various law firms. Not just in biglaw. It's a slow trickle, no doubt, but it has an effect. One of the baseline assumptions that the original poster posted was that a person who enters into the law firm world would work from age 25 to 65. That probably misses the bunch of people who retire prematurely out of law for second careers in politics/govt agencies.

JD Underdog said...

I cited this stat in a job interview and it was the key to getting my non attorney job. It proved that I wasn't just an anomaly.

Surprising how many people think that law is still a great career!

Frank the Underemployed Professional said...

Oh wow. Seriously? Holy hey! I've actually helped somebody!

Frank the Underemployed Professional said...

It would be really nice to know or to be able to calculate what percentage of graduates from the past 10 and 20 years were able to find employment in the legal profession. If the statistics suggest that only 53.8% of all lawyers since 1969 are working as lawyers, presumably newer graduates have a much lower percentage since we can expect that the percentage of older graduates working as lawyers is higher since they entered into a better job market.

Anonymous said...

ABSOLUTELY POSITIVELY DO NOT, I REPEAT, DO NOT JOIN THE ABA! I am a solo practitioner and ABA policies hurt solos in particular and all lawyers in general. I am not giving them a cent until they lower the number of law schools accredited in this country. Get rid of Toilet law. Once lawschool in Texas had a 40% bar passage rate last year. Such schools need to go. THERE IS AN OVERSUPPLY OF LAWYERS BECAUSE OF ABA'S AGGRESSIVE ACCREDITATION OF LAWSCHOOLS! if medical schools can control their numbers, so can we!

Anonymous said...

I graduated 16 years ago from a so-called top ten school. I practiced for 10 years in public interest law and now teach undergrads (and advise them about law school admission). I know a lot of law grads.

In an utterly unscientific study, I just went through my FB law grad friends to count who was still practicing, who not, etc. Of those who have been out of school >10 years (almost all of them) I found that 14 of my JD'd buddies were still practicing law FT and another 5 part-time. I found that 19 were doing something else -- mostly working in or running nonprofits, or teaching. One is a journalist. Another is a writer (good enough to actually earn her living that way). Another owns a bakery.

To my knowledge, not a single one of the non-practicing attorneys left because they couldn't find a job. They all left because they were tired of practicing law (or, for a few of the law professors and the journalist, never wanted to practice in the first place). Most practiced for 5-10 years before leaving.

Schools attended range widely from top ten to so-called bottom tier/regional.

So the statistics among my friends bear out that ~50% are still practicing. I have never heard from anyone on either end of the hiring table that a JD hurt a candidate in the non-legal job market. A lack of experience in the specific non-legal field will definitely hurt, and a JD won't do anything to overcome that deficit. But relevant experience + a JD is always a bonus.

And just to clarify, while our debt was not as large as yours, on average, we are not of the generation of debt-free law school. For example, I graduated with $60,000 in law school debt and another $10,000 in undergrad. Let's hear it for LRAPs.

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