This week, NALP announced more disconcerting news for recent law school graduates and current students. Last month, the organization released job placement data for the class of 2011, revealing just how challenging the employment market is for new lawyers. This month, NALP follows up with salary statistics for the same class, and the unsurprising but disappointing finding is that many new lawyers are making less now than they have for much of the last decade.
Salaries for all law school graduates have declined, with the mean salary for the class of 2011 falling almost 16% since 2009. The most dramatic change, however, is in private practice salaries. The median private practice salary has fallen 35% since 2009 (18% in the last year alone). Both median and mean pay for 2011 graduates in private practice has slipped below $100,000.
NALP executive director James Leipold points out that these declines in mean and median salary are not entirely, or even largely, the result of firms and other legal employers lowering starting salaries. While some firms have rolled back some of their starting salaries in response to market demands, large firms continue to pay first-year associates in and around $160,000. The decline in salaries is largely due to the diminishing number of such jobs available to new graduates, as large firms are shrinking their new classes of associates. The result is that a greater percentage of graduates employed in private practice can be found in small and mid-size firms, where starting salaries can be significantly lower than at larger firms.
An interesting effect of this shift is that the median reported salary of $60,000 is closer to the actual salaries of more graduates than has been true in recent years. According to NALP’s press release:
Because more salaries were in the $40,000-$65,000 range and fewer were at the $145,000 or $160,000 level, for the first time in many years, the median represented a salary actually obtained by many graduates. Thus, nearly 23% of reported salaries were within $5,000 of the median.
Why should this matter? It could help clarify the monetary value of a law school education. Since 2000, the salaries of law school graduates have fallen along a double peaked distribution, with one peak below $100,000 and another above (for more information on the evolution of this distribution pattern, see this article by NALP’s Judith Collins). As the size of the peak above $100,000 grew over the course of the last decade, the median salary would fall into the valley between the peaks, where few salaries actually fell.
The result has been that law students and potential law students might mistakenly believe that they can expect to make somewhere in the range of $75,000 to $100,000 upon graduation, and quite possibly more (I speak from my own experience as a member of the class of 2006). The reality has long been that most graduates will wind up in one of the two peaks, making around $50,000 (in public interest, small firms and government positions) or $150,000 (in large firms). Awaking to this reality can be challenging for law students, causing many students to begin law school open to the possibilities of public service and small firm life but end it hunting for a large firm job that will pay the bills.
Law School Class of 2011 Salary Distribution (via NALP)
But as the pool of high-paying large firm jobs shrinks, both the mean and median salaries are falling closer to that first distribution peak. This means that both future law students and the law schools that educate them must better evaluate how much a future lawyer should be willing to borrow for the privilege of becoming an attorney.
Posted by Emily Fisher