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.

Friday, July 9, 2010

Old News: Wiki-hooliganism strikes Seton Hall Law School.

This is old news, but it's still funny.  I'm sure this story was blogged about to death when it was fresh, but I'm linking to it anyway for those who missed it and who didn't see Hardknock's post at BIDER.

Blog hooligan "Scaddenfarts" dropped a big stinker on the Wikipedia entry for Seton Hall Law School.  Referring to the Dean:

"The man takes more liberty with salary statistics than Michael Jackson did with 4 year olds at a Chuck-E-Cheese playpen."
"Scaddenfarts" or a group of people engaged in an edit war that went on for three months from May 6 through August 9 of 2009 until the Wikipolice finally corralled him/them.  (See the edit history for May-August 2009.)

Imagine what would happen if a group of thirty blog hooligans versed in Wikipedia Edit-ese descended upon an unsuspecting TTT's entry and engaged in a prolonged edit war, citing Wikipedia rules and arguing with shills on the entry's discussion page.

Monday, July 5, 2010

40 Years of Lawyer Overproduction, a Data Table, and 2 Charts

In my last two posts I explored the rate of new lawyer production in terms of the inverse number of attorneys per capita that could be sustained by graduation rates (expressed in terms of one lawyer for every X-amount of people) using the assumption that a new lawyer would want to practice for 40 years.  Let's call this number the Sustained Inverse Lawyers Per Capita, or SILPC.

I was curious about the historical trend, so I conducted a study and was surprised to discover that the law schools have been overproducing lawyers for almost 40 years!  In other words, the rate of production in terms of SLPC has averaged one lawyer for every 171.9 people since 1973.  I knew that lawyer overproduction had been a problem for decades, but I had never imagined that it was this bad!  I had previously assumed that the SILPC had decreased steadily over time, but apparently this is not the case.

I calculated this data using U.S. Census Data for the U.S. population and ABA statistics for the number of JDs awarded each year since 1963.

Assuming that, on average, a lawyer would want to practice for 40 years, SILPC = Population / (JDs Awarded * 40)

Year JDs Awarded US Population Inverse Lawyers Per Capita (SILPC)
1963 9,638 189,242,000 490.9
1964 10,491 191,889,000 457.3
1965 11,507 194,303,000 422.1
1966 13,115 196,560,000 374.7
1967 14,738 198,712,000 337.1
1968 16,007 200,706,000 313.5
1969 16,733 202,677,000 302.8
1970 17,477 205,052,000 293.3
1971 17,006 207,661,000 305.3
1972 22,342 209,896,000 234.9
1973 27,756 211,909,000 190.9
1974 28,729 213,854,000 186.1
1975 29,961 215,973,000 180.2
1976 32,597 218,035,000 167.2
1977 33,640 220,239,000 163.7
1978 33,317 222,585,000 167.0
1979 34,590 225,055,000 162.7
1980 35,059 227,726,000 162.4
1981 35,604 229,966,000 161.5
1982 34,847 232,188,000 166.6
1983 36,390 234,307,000 161.0
1984 36,688 236,348,000 161.1
1985 36,830 238,466,000 161.9
1986 36,122 240,651,000 166.6
1987 35,479 242,804,000 171.1
1988 35,702 245,021,000 171.6
1989 35,521 247,342,000 174.1
1990 36,386 250,132,000 171.9
1991 38,801 253,493,000 163.3
1992 39,082 256,894,000 164.3
1993 39,915 260,255,000 163.0
1994 39,711 263,436,000 165.8
1995 39,355 266,557,000 169.3
1996 39,921 269,667,000 168.9
1997 41,115 272,912,000 165.9
1998 39,456 276,115,000 175.0
1999 39,072 279,295,000 178.7
2000 38,158 282,434,000 185.0
2001 37,910 285,545,000 188.3
2002 38,606 288,600,000 186.9
2003 38,875 291,221,000 187.3
2004 40,024 293,842,000 183.5
2005 42,672 296,463,000 173.7
2006 43,883 299,084,000 170.4
2007 43,518 301,705,000 173.3
2008 43,588 304,326,000 174.5
2009 44,000 306,947,000 174.4

From 1963 to 1970 the SILPC decreased steadily until a huge jump occurred between 1971 and 1973.  The worst year was 1983 when the rate bottomed out at 161.0.  Perhaps the market was able to comfortably absorb this amount of lawyer overproduction in the Sixties and Seventies.  Presumably, new attorneys have suffered difficulty finding career-building entry-level jobs and earning a living practicing law since the late Seventies or early Eighties, but the Internet was not available to chronicle it.  It is also possible that lawyers were more easily able to obtain upwardly mobile white collar jobs in those decades at a time before hordes of people went to college.  In other words, the Law School Scam took root 40 years ago.

If I can obtain the data, I would like to plot the number of attorneys who maintained licenses every year since 1963.  A plot of the data shows that JD production has outpaced U.S. population growth by a tremendous margin since 1963:

The red data in the chart above is SILPC.  It has remained fairly steady since 1973 with an average SILPC of 171.9.

This last chart expresses U.S. population growth and the growth in the amount of JDs awarded as a percentage since 1963.  So, a data point of 50% population growth would mean that the population had increased by 50% since 1963.  A data point of 300% JDs awarded means that the number of JDs awarded that year was four times the number awarded in 1963.  (A number of 0% would mean that the number is the same as it was in 1963, and a number of 100% would mean that it was double the amount in 1963.)

------- EDITOR'S NOTE ------- 

March 11, 2011.  I want to clarify that the 40 year average lawyer-to-population ratio that new JD production can sustain (which I eventually calculated to be 1 lawyer for every 171.9 people) is NOT the same thing as the actual lawyer-to-population ratio.  The number I calculated for a given year of new JD production would only reflect the actual lawyer-to-population ratio if the U.S. population remained the same for the following 40 years.  This is because while the U.S. population continues to increase, the number of JDs produced in a given prior year is static and cannot increase proportionally with population growth.

Consequently, Using ABA and BLS stats, the actual lawyer-to-population ratio is about 1 lawyer for every 215 people (only counting JDs minted over the past 40 years). 

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