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The Law School Investment Equation

The Law School Investment Equation. Professor Jerry Organ University of St. Thomas School of Law (MN). New Information -- Employment. NALP – Aggregated employment and salary data. ABA – School-specific and more granular employment data

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The Law School Investment Equation

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  1. The Law School Investment Equation Professor Jerry Organ University of St. Thomas School of Law (MN)

  2. New Information -- Employment • NALP – Aggregated employment and salary data. • ABA – School-specific and more granular employment data • ABA – Proposed reporting format for schools – apples to apples comparisons

  3. ABA School Specific Data • ABA published in March the school-specific employment data for 2010 graduates. • ABA will be publishing shortly the school-specific employment data for 2011 graduates. • This is presented in an excel spreadsheet that can be downloaded easily and can be sorted by any number of categories – unknown, unemployed seeking, unemployed not seeking, employed bar passage required, employed law school funded, etc.

  4. Understanding 2010 Data – Unknown • Unknown – the middle 20 schools for percentage of graduates whose employment status is unknown range from 1.7% to 2.5% and the bottom 20 schools are all at 0. • Unknown – the top 20 schools for percentage of graduates whose employment status is unknown range from 8.8% to 26.2%. • What does this tell us? • At a subset of schools, generally in the fourth tier, a significant number of graduates are disinterested in supporting the school’s efforts to develop as robust a data set as possible. • Presumptively unemployed?

  5. Understanding 2010 Data – Unemployed Seeking • Unemployed seeking – the middle 20 schools for percentage of graduates who are unemployed and seeking employment range from 4.9% to 6.6% and the bottom 20 schools range from 0 to 1%. • Unemployed seeking– the top 20 schools for percentage of graduates who are unemployed and seeking employment range from 14% to 30%, all but three of which are in the fourth tier. • What does this tell us? • At a subset of schools, generally in the fourth tier, a significant number of graduates are struggling to find gainful employment.

  6. Understanding 2010 DataUnemployed Not Seeking • Unemployed not seeking – the middle 20 schools for percentage of graduates who are unemployed and not seeking work is 2.1% to 2.6% and the bottom 20 schools are all at 0. • Unemployed not seeking – the top 20 schools for percentage of graduates who are unemployed and not seeking range from 6.1% to 18%, with four schools over 10%. • What does this tell us? • A relatively small subset of schools appears to have an unusually large number of graduates not seeking employment. This will be interesting to track over time. • The top 20 schools for unemployed not seeking include a few top 50 schools and several top 100 schools.

  7. Understanding 2010 DataLaw School Funded • Law School Funded – the middle 20 schools for percentage of graduates whose employment was law school funded ranged from 1.2% to 1.8% and the bottom 20 schools are all at 0. • Law School Funded – the top 20 schools for percentage of graduates whose employment was law school funded ranged from 10.6% to 19% • What does this tell us? • Most of the top 20 schools were actually in the top 100 with nine in the top 50. • While these schools are supporting their graduates, one has to look at their employment numbers with a little more skepticism given that they are subsidizing the market.

  8. Understanding 2010 Data Solo Practice • Solo Practice – the middle 20 schools for percentage of graduates in solo practice range from 1.9% to 2.8% and the bottom 20 schools are all at 0 (15 of which are top 50 schools). • Solo Practice – the top 20 schools for percentage of graduates who are engaged in solo practice range from 6.9% to 18.3%. • What does this tell us? • At a subset of schools a significant number of graduates are jumping into solo practice straight out of law school. • While these are mostly fourth tier schools, the list includes schools across the spectrum. • These schools may want to be focusing on providing specific support for this set of graduates.

  9. Understanding 2010 DataSmall Firm Employment • Firm Size 2-10– the middle 20 schools for percentage of graduates who were in small firms – 2-10 – range from 17.9% to 20.2% and the bottom 20 schools are from 5.7% to 0.3% (all top 50 schools). • Firm Size 2-10 – the top 20 schools for percentage of graduates who were employed with firms of 2-10 range from 31.3% to 40.8% (none are top 50 schools). • What does this tell us? • A significant number of schools are placing one out of six graduates up to two out of five graduates in small firms. • This is the “mode” at many schools and perhaps should be the educational focus at such schools.

  10. Understanding 2010 DataMedium Sized Firms – 51-100 • Firm Size 51-100– the middle 20 schools for percentage of graduates who were in small firms – 51-100 – range from 1.6% to 1.9% and the bottom 20 schools are all at 0 (predominantly fourth tier schools). • Firm Size 51-100 – the top 20 schools for percentage of graduates who were employed with firms of 51-100 range from 3.7% to 9.4% (15 of which are top 100 schools). • Similar numbers for 101-250 and 251-500, except that top 20 schools increasingly are top 50 schools. • What does this tell us? • The vast majority of schools are placing very few people even in medium sized firms of 51-100 - let alone 101-250 or 251-500 – 180 schools have fewer than 3.7% of grads in medium-sized firms.

  11. Understanding 2010 DataVery Large Firms • Firm Size 501+– the middle 20 schools for percentage of graduates who were in very large firms – 501+ – range from 1.6% to 2.4% and the bottom 20 schools are all at 0 (predominantly fourth tier schools). • Firm Size 501+– the top 20 schools for percentage of graduates who were employed with very large firms range from 19.6% to 60.4% (all top 50 schools). • Fewer than one-third of schools had more than 5% of their graduates going to very large firms. • What does this tell us? • There is a bifurcated market – lower ranked schools feed smaller firms while higher ranked schools feed very large firms.

  12. Understanding 2010 DataFederal Clerkships • Federal clerkships– the middle 20 schools for percentage of graduates who had federal clerkships range from 1.2% to 1.7% and the bottom 20 schools are all at 0 (and are primarily fourth tier schools). • Federal clerkships – the top 20 schools for percentage of graduates who had federal clerkships range from 6.7% to 30% (almost all are top 50 schools). • Only 10% of schools had 5% of their graduates in federal clerkships. • What does this tell us? • As with big firms this suggests a bifurcated market.

  13. Understanding 2010 DataState Clerkships • State clerkships– the middle 20 schools for percentage of graduates who had state clerkships range from 3.3% to 4% and the bottom 20 schools are between 0 and 0.6 %(and are primarily fourth tier schools). • State clerkships – the top 20 schools for percentage of graduates who had state clerkships range from 12.3% to 30.3% (with the three NJ schools running 25% or more). • What does this tell us? • 15 of the schools in the top 20 are state schools, suggesting that state schools may be more likely feeder schools for state clerkships. • Almost no top 50 schools are in the top 20 for state clerkships.

  14. Understanding 2010 DataBusiness • Business -- the middle 20 schools for percentage of graduates who were working in business range from 12.6% to 13.9% and the bottom 20 schools are all between 5.9% and 1.6% (and are primarily top 50 schools). • Business – the top 20 schools for percentage of graduates who were working in business 20.5% to 30.3% (none are top 50 schools). • What does this tell us? • As with big firms this suggests a bifurcated market. • This is still murky data as the 2010 data did not include a breakdown of part-time or full-time positions. • There is long-term/short-term data, but I have not gotten that sophisticated in my analysis yet.

  15. Understanding 2010 DataGovernment • Government – the middle 20 schools for graduates who were working in government range from 9.7% to 10.5% and the bottom 20 schools are all between 5.2% and 1.2% (and are primarily top 20 schools and fourth tier schools). • Government – the top 20 schools for percentage of graduates who were working in government range from 17.4% to 29.4% (a broad mix of schools). • What does this tell us? • A large number of schools have a significant percentage of graduates employed in government. • But some schools do have far more than the norm or far fewer than the norm.

  16. Understanding 2010 DataPublic Interest • Public Interest – the middle 20 schools for percentage of graduates who were working in public interest range from 4.5% to 5.1% and the bottom 20 schools are all between 1.8% and 0% (and are primarily top 50 schools)(and are mostly fourth tier schools). • Public Interest – the top 20 schools for percentage of graduates who were working in public interest generally range from 9.9% to 18.8% with one school at 33.3% (this was a broad mix of schools). • What does this tell us? • There are some schools that clearly place a greater emphasis on public interest positions. • For students interested in public interest, that is something worth considering

  17. Understanding 2010 DataGeography • Most law schools are “local” – their graduates are employed in-state or in a neighboring state. • On average, two-thirds of employed graduates are employed in the state in which the law school is located. 120 schools had at least two-thirds of employed graduates employed in the state in which the law school is located. • For 140 schools, at least two of the top three states in which their graduates are employed are the state of the law school and a neighboring state. • Moreover, for the vast majority of states, the top feeder schools are schools in the state or in a neighboring state.

  18. Understanding 2010 DataAverage Salaries • The ABA did not gather salary information. • NALP continues to gather salary information. • NALP’s national average salary for all attorneys tends to overstate the average because of disproportionate reporting by those in higher salary categories. • But for any given category of employment, NALP has several hundred responses, suggesting that the average within a category is fairly accurate for that category.

  19. Understanding 2010 DataAverage Salaries • So what if you took NALP’s average salary per category on a national basis and applied those averages to the number of graduates employed in each category from a given law school? • This would allow you to create an imputed average salary for employed graduates with a few caveats. • First – with 2010 data, there is no indication of full-time or part-time positions – so salary might be slightly overstated. • Second – what should you do with those without salaries? To have an average for all graduates, you either allocate them 0 or make an assumption about an appropriate assumed salary.

  20. Understanding 2010 DataAverage Salaries • If the imputed salary for graduate students, unknowns, unemployed seeking and unemployed not seeking is $5000, and all of the other salaries use NALP’s average salary data per each category, 80 schools have an average salary for graduates under $50000 and 150 schools have an average salary under $60000. • Only 19 schools have an average salary of $80000 or more.

  21. New Reporting Formats Apples to Apples Comparisons • The Council for the Section of Legal Education and Admissions to the Bar has approved the Standard Review Committees recommendation to amend Standard 509 – Consumer Information. • The major changes involve consistent reporting formats for employment and for scholarship retention. • Assuming the House of Delegates approves these recommendations, then starting next year this data will be available.

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