ONCE MORE ON THE MILLION DOLLAR JD DEGREE

In late July, my article “The Dangerous, Million-Dollar Distraction” appeared here before its republication at Am Law Daily and Business Insider. In it, I discussed a study purporting to calculate the lifetime premium of a law degree compared to BA holders. The authors of the study, Professors Michael Simkovic and Frank McIntyre, weren’t pleased and Am Law Daily has now published their rejoinder. Were it not for their now pervasive claims relating to my alleged confusion, errors, and mistakes, I’d let it pass because the study has already received more attention than it deserves.

The real point

There were no errors in my analysis. My view – expressed in the article – is that the decision to attend law school should not turn on the hope of future financial rewards. In that respect, Simkovic and McIntyre take a strong position that looks like career advice based on predictions about the future: “[M]any college graduates who follow the critics’ advice and skip law school will forego a lucrative career and face higher long-term risks of financial hardship.” (p. 12)

The law is a great profession that I love, but it’s not for everyone. Through the years and for many undergraduates, law school has been a default position for liberal arts majors who can’t decide what to do next. For far too many, life after law school becomes a process whereby great expectations clash with harsh reality in a way that creates career dissatisfaction and worse.

As a consequence, for me, the most important problem with the Simkovic/McIntyre study is that it uses aggregate data in inviting students individually to choose a legal career in the pursuit of financial security or a safe return on their educational investment. That is the wrong reason for anyone to become a lawyer.

Multiple markets

No one talks much about the two markets for law schools. The Simkovic/McIntyre study ignores the differences among schools and, in a response to Professor Deborah Merritt’s critique, Simkovic asserted on Brian Leiter’s Law School Reports blog that he “doesn’t think the evidence for a bimodal distribution of lifetime earnings is very compelling.” One wonders what profession he’s looking at.

For some – especially but not exclusively graduates from top law schools who land (and keep) jobs in big firms – practicing law can be lucrative. But those outcomes are on the far end of a severely skewed distribution of attorney incomes. As NALP data confirm, that skewing begins from the moment of graduation. Big law firm first-year associates earn an average of more than $130,000 yearly and average partner profits for the Am Law 100 exceed $1 million.

But big law attorneys account for only about 10 percent of all practitioners. Far more people – mostly but not exclusively graduates from law schools outside the top group – wind up at the much lower end of the distribution. According to the Bureau of Labor Statistics, the median income for all lawyers in the United States in 2010 was $112,760.

Red herrings or real issues?

Professor Simkovic — initially via Professor Leiter’s blog — called my observations about income distribution a “red herring.” But the real red herring is using the average of a skewed distribution to tout a “Million Dollar Degree” – first in his study’s original title and then persisting in the final sentence of the article’s synopsis. Of course, it attracts more attention than even his dramatically lower median (midpoint) value. (In his Leiter blog post, Simkovic endorsed $330,000 as the lifetime (40-year career) net JD-degree premium for the median (midpoint) of his sample.)

At some point below the 25th percentile, even Simkovic’s study proves that the so-called JD-degree premium turns negative. That includes a lot of lawyers, although the study doesn’t disclose the number.

Contrived controversies

My other observations to which Simkovic took exception — initially in his Leiter blog post and now in his Am Law Daily response — relate to points that his own study acknowledges: the presence of a statistical correlation doesn’t prove causation (p. 25) or predict the future (p. 38); the conclusions of any regression analysis depend on its assumptions (pp. 39-41); none of the attorneys in his 1,382-person sample graduated after 2008 (p. 13 and n. 31; companion slide 13).

(One of the more perplexing criticisms in Simkovic’s Leiter blog post was that I was wrong about half of all JD-degree holders finding themselves below the median for all JD-degree holders. My statement simply embodied the definition of a median – half above and half below that midpoint. His related comment about median incomes relative to bachelor’s degree holders is irrelevant to anything I wrote.)

Others will decide the fate of the Simkovic/McIntyre study as an enduring scholarly work. My views will not move Professor Simkovic or anyone else to a different position on the underlying issue of whether law schools today should rethink their business models in light of the profession’s ongoing transformation.

Reality therapy

But the academic debate has little bearing on my mission. Rather, as I wrote, my concern is for young people who “rely on an incomplete understanding of the study’s limitations to reinforce their own confirmation bias in favor of pursuing a legal career primarily for financial reasons.”

Several years ago, I added an undergraduate course to my workload in the hope of providing students with information that might help them in deciding whether to pursue a legal career. The vast majority of those students go on to law school, but with an increased awareness of the road ahead. They understand that even in tough economic times, many JD-degree holders will do well, while others won’t.

The reality of those less fortunate creates challenges for the entire profession because: 1) most prelaw students have a difficult time imagining that they’ll ever find themselves in the lower 25th percentile of anything; and 2) even among the so-called “winners” who wind up a lot higher in the overall income distribution, attorney career dissatisfaction remains widespread.

In short, prelaw students should tread carefully along the path toward law school. The law can lead to a great career, but it’s not for everyone.

Even if the high-end market for new attorneys were booming – which it isn’t – pursuing a JD for financial reasons is a mistake. As a wise person said long ago, ”Not everything that can be counted counts; not everything that counts can be counted.”

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