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Adventures In Supply And Demand, With Prof. Steve Diamond

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In the midst of the pathetic but undeniably entertaining comments-section meltdown Paul referenced yesterday, master of self-refutation Steve Diamond asserted that the data showed that law schools “have in fact produced too few lawyers.”

How is this possible when more than 40% of law school graduates are not getting real jobs that require bar passage? It’s not, and Diamond has nothing to offer on this point but…not even hand-waving, more like briefly lifting a pinkie finger. However, the blog length version contains an argument that’s a must-read for connoisseurs of the farcical and the illogical. Remember, as you read this, that Diamond believes that critics of the current model of legal education like Campos and Tamanaha are agents for the Cato Institute:

Well, there were approximately 425,000 lawyers employed in 1997 and 600,000 in 2014. That means over 18 years we added, net, about 175,000 new lawyers. Every year – except 2008 – that annual number increased. That tells me society wanted to employ more lawyers and when we add in the fact that lawyer incomes increased each year in that period as well, from a low in 1997 of about 73,000 to a high in 2014 of 133,000 it tells me society was willing to pay lawyers more also.

That growth in the average (mean) annual wage paid to lawyers is significant, too, because it outstripped inflation and the growth in GDP. This suggests that lawyers have market power. No wonder Cato and the Koch Brothers are upset.

Where to begin?

  • I like the classics, and the use of mean (rather than median) incomes in this kind of context is bullshit from the school they burned down to build the old school.  I’m sure the next Santa Clara Law grad to get a job at Starbucks will be happy to know that he and Howard Schultz have a average (mean) income of more than $10 million a year.
  • The fact that more lawyers have jobs in 2014 than in 1997 is a compelling rebuttal to the zero people who have ever argued that every law school in the United States should be shut down.  As a rebuttal to the argument that there shouldn’t be dozens of law schools where an investment of $200K or more gets you a less-than-even chance of getting any job that requires a law degree and a tiny chance of getting a legal job that would justify the debt load, it’s neither here nor there.
  • But this isn’t even the best part.  According to Diamond, critics of the current legal educational model are stooges of Cato and the Koch Brothers (who also want to bring back Jim Crow.)  The reason that the plutocrats are critical of law schools, according to his new theory, is that lawyers have too much bargaining power. So they have sent Campos et al. out in the world to…substantially tighten the labor market for lawyers.  Producing many fewer law degrees would totally serve the interests of the Koch Brothers because…look, it’s Halley’s Comet!  The progressive position, conversely, is to flood a market (that by any relevant measure is already massively over-saturated) with JDs who owe massive amounts of money to banks, which would be great for labor interests because…hey, isn’t that Kohoutek?

It’s not exactly news that Diamond is a pair and a three of a kind short of a full house, but even by his standards this is awesome.

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  • postmodulator

    You know, I genuinely applaud the nerve of someone willing to argue that Campos is a Koch stooge. That’s a guy with confidence, right there.

    Now playing: REM – Kohoutek

    • The Dark Avenger

      Hedley Lamarr: Wait a minute… there might be legal precedent. Of course! Land-snatching!
      [grabs a law book]

      Hedley Lamarr: Land, land… “Land: see Snatch.”

      [flips back several pages]

      Hedley Lamarr: Ah, Haley vs. United States. Haley: 7, United States: nothing. You see, it can be done!

  • Nobdy

    Is it worth noting that at the rate of 40,000 per year law schools.wpuld have pumped out 680,000 graduates in the 17 years between 97 and 2014; 80,000 more than the total number of lawyers cited by Diamond. That means that assuming that every lawyer employed in ’97 retired in the last 17 years we would still have a surplus by his lights. Now look at the average time since graduation for a practicing attorney and do some math and…hey, how about that NFL draft?

    • Murc

      I think it’s very worth noting that, Nobdy!

      Also worth noting: it is POSSIBLE that Diamond merely phrased things artfully, but this?

      we add in the fact that lawyer incomes increased each year in that period as well, from a low in 1997 of about 73,000 to a high in 2014 of 133,000

      Looks awful; he’s comparing the low in 1997 to the high in 2014?

      I wouldn’t be surprised to learn he’s doing that in nominal dollars, too.

      • MattT

        That’s actually probably the most defensible thing here. I think the argument is that if you look at the mean for each year, the lowest value was at the beginning and the highest at the end. That’s a totally useless measure, but it is a consistent one.

        I’d be shocked if you weren’t correct about the nominal dollars part though.

      • cpinva

        “I wouldn’t be surprised to learn he’s doing that in nominal dollars, too.”

        you assume (wrongly, I submit), that he’s aware of constant dollars.

        where he really lost me is the Cato Institute/Koch Brothers bit. I think he just threw that in there for…………reasons. I sense that mr. diamond has reached (or is reaching) terminal nutball velocity. he needs a nice, hot bubble bath, and a soothing cup of chamomile tea, along with a straightjacket and some heavy-duty opioids.

        • DW

          you assume (wrongly, I submit), that he’s aware of constant dollars.

          Oh, but his students “learn how to do IPOs” so I’m sure he’s quite up to date on all that financial stuff.

          (Although, maybe not the concept of NPV…)

    • DW

      The production rate of JDs by schools versus the total employment numbers was specifically brought up by Merritt herself in the comments at PrawfsBlawg. Diamond, in response… Look, a squirrel!

  • Latverian Diplomat

    I guess I can imagine an argument that says that if there aren’t enough lawyers, certain areas like public defenders, civil rights litigation, labor law, etc. will go begging and the plutocrats would like that.

    But,
    1) There are always a few idealists, and
    2) The plutocrats figured out it was a lot easier to underfund and otherwise legislatively hamstring those legal functions than to try and just starve them of lawyers.

    The AMA would be very surprised to discover that their tight control on the number of medical school slots has been reducing the bargaining power of doctors all this time.

    • toberdog

      The plutocrats started work on this “problem”, way back during the Reagan Administration, by the very straightforward method of reducing the amount of money spent on Legal Aid societies and public defenders.

    • Anna in PDX

      To me, having very desultorily followed this whole debate as I have no connection to the law sector, it seems logical that if there are not enough public defenders (assuming this is a problem, is it? I would not know) the simplest assumption of the problem is that law school costs are too damned high and people can’t afford such jobs because they have loans to pay back.

      I can’t imagine that the problem stems from not enough law schools existing. Rather, it’s because law schools are run by grifters and profiteers and the student loan system is a huge crock that incentivizes this behavior on the part of higher ed as a whole and law schools in particular.

      • BoredJD

        For a (short) while it was actually the opposite. The loan balances were so high that it made much more sense to take the 40K public interest job than the 55K private sector job because one wiped your loans in 10 years and the other didn’t.

        Then, of course, greedy law schools started crowing about how students could borrow 300K for law school and stick it to the taxpayer and how IBR was really some sort of backdoor subsidy for law professors to continue propping up the foundations of Western civilization with their scholarship and how it meant no-strings attached “Harvard-style legal education” for everybody, but especially “Harvard-style salaries” for the tenured professors and admins.

        And then the New America Foundation made the idea of law students getting free rides the centerpiece of their proposals for student loan reform, and then Obama is taking those proposals to Congress, and now the program is farked.

        This isn’t some grand conspiracy theory- it’s actually what happened. The law schools were so clueless and had no idea what they were doing looked utterly shameless to any outside observer that they helped kill a program that was helping their students and a lot of needy people.

  • fledermaus

    A fine “Mahoke” to you all. This is just a public service announcement that the monthly Bohemian Grove meeting has been postponed two weeks to accommodate the Marin County Dressage competition that many of you will be attending. It seems that our attempts to destroy rule of law in the USA will be regrettably delayed.

    PS: Also Charlie K please do not bring your wife’s tired truffle potato salad again. We’re all sick of it.

  • DAS

    I can imagine that there are legal niches where there is more need for lawyers than supply: doing legal work for poor clients, handling the legal needs (setting up trusts and powers of attorney) of an aging populace. But if more lawyers go into these fields, which I doubt pay that much — how much does a poor person have to pay a criminal defense lawyer? how much does someone whose only real asset is a $250K house have to pay a lawyer to set up a trust? — wouldn’t the average (and even the median) income of attorneys go down?

    • Latverian Diplomat

      As I said above, the problem there is less the supply of lawyers, and more the supply of $$$ to pay those lawyers, and provide them decent working conditions and reasonable workloads.

      • Hogan

        And debt service. Which brings us back to d’oh!

    • Morse Code for J

      I might need liposuction and rhinoplasty, but if I don’t have $50,000 lying around, no plastic surgeon is going to be all that interested in providing them.

      Likewise, I might want an attorney to explore the legal ramifications of some of my personal and business decisions, but if I don’t have $5,000 lying around to offer as a retainer, I can understand why none are going to be interested in advising me.

    • MacK

      Had a junior Associate GC working on a small software acquisition once from an individual. The AGC explained to me that there was a hitch because the individual’s counsel would not let him give us a non-infringement warranty.

      The following conversation took place:

      “Andrew why do you want this warranty?”

      “In case we get sued – legal fees”

      “what does this guy have?”

      “what do you mean?”

      “where does he live?”

      “[neighbourhood of 3-bed tract houses worth maybe $300k]”

      “and he’s got a mortgage?”

      “well yes, everyone has…”

      “what was he driving?”

      “What do you mean?”

      “was it a Porsche, a Ferrari?”

      “[a 6 year old minivan]’

      “Andrew, do you know what we spend on a typical patent defence?”

      “a lot that’s why I want the indemnity…”

      “Andrew, case X has cost $2 million so far, case Y (before me) cost $8 million – has [individual] got millions?”

      “And we are paying him…?”

      “$200k”

      “You know, an indemnity is only worth what the indemnifier is worth … and ….Andrew, I’m not going to take his house if we get sued…(and by the way I’d like him to be cooperative and not pissed off)”

      “your won’t?”

      “No. Drop the indemnity”

      • cpinva

        …(and by the way I’d like him to be cooperative and not pissed off”)

        the single most important part. if it makes you feel any better, it turns out that some people, regardless of how long they’ve been doing the job, never quite figure this out.

        • MacK

          Maybe, to me there has always been a moral dimension to many legal questions – and so many people say I’m a law and economics type.

        • MacK

          I’d add though something my uncle, aunt and grandfather explained to me, “apologising and doing the right thing matters, because – and always remember –pissed off people sue”

  • Shakezula

    Everyone knows Campos is a lackey of the ketchup and vodka cartels. (Also, lizard people.)

    I know I’m probably applying logic where it doesn’t belong, but do people like Diamond get out of wailing LEAVE LAW SCHOOLS ALOOONE? (Or as law types say “Qwee boner”?)

    • I know I’m probably applying logic where it doesn’t belong, but do people like Diamond get out of wailing LEAVE LAW SCHOOLS ALOOONE? (Or as law types say “Qwee boner”?)

      I think the answer is “Campos delenda est!”

  • Paul Campos

    So much fail.

    First, he doesn’t even get his tortured numbers right: nominal GDP more than doubled between 1997 and 2014, and the Cray supercomputer I have in my office says $133,000 is less than twice of $73,000 (of course he’s using nominal dollars).

    Second, the whole point of the Cato Three’s critique is that lawyers and law school graduates are two completely different categories, in a way that, for example, doctors and medical school graduates are not.

    Third — wait, why am I arguing with a crazy person again? Chuck and Dave, COLA-adjusted bribes just aren’t enough for this sort of work any more. I’m going on strike.

    • cpinva

      “COLA-adjusted bribes just aren’t enough for this sort of work any more.”

      wow, they give you sodas too?

      • Hogan

        Don’t get too excited–it’s RC.

      • Ahuitzotl

        not too … just colas

  • Sebastian_h

    He is a great example for those who suggest that much of college credentialing is about signalling rather than learning. This is a YALE graduate.

    Of course I have great stories about Ivy League stupidity. Large law firm while I was working as a paralegal and going to school– two Yalies and a graduate from Harvard law are doing an enormous document production. We have an entire room of originals from the client. They are two weeks into a privilege review and I am supposed to start creating a privilege log. (Why wasn’t a paralegal involved at the beginning? Why weren’t they creating the log as they went along? Who knows). So they give documents with portions redacted in big black marker. I say “can I have the original pages too so that I can verify we have all of the possible privileges documented.” [Much talking between them]

    “Can’t you just trust our notes?”

    [looks at illegible and mostly useless notes]

    “Not Really, I need to be able to see what is underneath the marker to fully document the privilege log.”

    “Well, these are the originals”

    [Shocked look.] “Can you give me the clean copies then?”

    “What to do you mean? This is all we have.”

    [Ack!]

    • matt w

      “I am supposed to start creating a privilege log”

      When you need to consult it does someone tell you to check your privilege?

    • cpinva

      ” (Why wasn’t a paralegal involved at the beginning? Why weren’t they creating the log as they went along? Who knows).”

      the “logical” answer is: because that costs money.

      I have no idea what their answer would be.

      • toberdog

        I’ll bet you any number of hours at the rate they were billing that their answer would have amounted to, “Oh, we didn’t think of that.”

        • MacK

          You are wrong! wrong wrong wrong. Their answer was to write 6 x 30 page memos, get two other associates in, and then puzzle over how to describe this 500+ hours of billing on their time-sheets so the client did not ask… WTF!

    • MacK

      Spoliation…. who what where when (probably Quinn)

  • DrDick

    So despite having 3 times as many lawyers per capita than the next highest country, we have a lawyer shortage?

    • dmsilev

      Perhaps we should reframe this as an opportunity for law schools. They can address the crippling shortage of lawyers in other countries by refocusing their product mix, errr graduating class, towards the export market.

      • DrDick

        Sort of take a page from the old time Caribbean law and medical schools, but reverse the flow?

        • Shakezula

          Just don’t cross the streams.

      • MikeMikeMike

        refocusing their product mix, errr graduating class, towards the export market

        Isn’t that why LL.M. programs exist?

    • This is why ‘murcans won’t be vegans. There are loads of excess meat lying around, juicy and tender.

  • Rob in CT

    I read the comment thread. Wow, he’s ridiculous. Not only does he make terrible arguments (mean salary, nominal dollars, etc), the combination of whining about supposed incivility whilst also being condescending as hell (“this sophomoric forum is not the place for debating these weighty issues”) is precious.

    • yupyup

      This thread is another classic where he does the same thing after having thoroughly lost the debate.

      When faced with the kind of argument made here I tend to agree with so many of my academic colleagues that engaging with the law school critics is a waste of time.

    • Scott Lemieux

      How much did Charles Koch pay you to say that?

      • I’ll admit that I can be bought. For cash in the low nine figures, I’ll say whatever the Koches want.

        • postmodulator

          “I can always pay half of the working class to bullshit the other half.”

        • Malaclypse

          I’ll work for high eights.

        • Ahuitzotl

          low 9 figures? like, 0.00000009 ?

    • Scott Lemieux

      “this sophomoric forum is not the place for debating these weighty issues”

      What’s even more awesome is that he follows this up by saying that he’d be happy to discuss the matter further in exchange for a free trip to D.C.

      • Steve Diamond

        I would be happy to accept the same compensation as Cato paid to Paul and Brian.

        • Paul Campos

          I can’t speak for Brian of course, but what Cato paid me plus $3.95 will get you a large coffee at Starbucks.

          • leftwingfox

            Doing the math, that might be the first time the Kochs paid taxes on anything.

          • Steve Diamond

            So you considered it so important to speak at the Cato Institute that you paid your own way?

            • Paul Campos

              This isn’t one of your law school classes, where you can frame a question in the most idiotic possible way and treat it as a gotcha.

              • Steve Diamond

                I’ll take that as a yes.

                • DW

                  Hmm. How so?

                • Paul Campos

                  You are insufferable as well as delusional.

                  Yes they paid my expenses. No that doesn’t count as getting paid, since getting reimbursed for expenses isn’t income.

                  BTW I’m giving a talk in a couple of months to the National Lawyers Guild, so you can then point out that I also speak to well-known communist front organizations, just to cover all my bases.

                • ColBatGuano

                  I’ve seen second graders with better skills at argumentation.

        • Brian Tamanaha

          I received $0 for my appearance. And I walked to Cato from Georgetown, which I was visiting at the time, so my talk did not cost anything. Though, now that I think about it, the folks at Cato did give me some bottled water. So I guess I’m on the Koch payroll after all.

  • Barry_D

    I’d guess that Diamond simply isn’t used to real debate, where people (a) are free to argue back, (b) know something and (c) can go off and check facts. IMHO, the latter hurts a lot of law bloggers; I think that they’re more used to oral debates. However, Diamond is far from alone in his incapacity; he’s just more shameless and/or more unaware.

    • Barry_D

      BTW, I went back, and BDG has erased the last half-dozen comments.

      • Steve Diamond

        Ok, I understand now. I was not aware of that. I don’t like it when that happens.

  • MacK

    I have to say, I went to Diamond’s blog … and its worrying. I’m probably the last person to have sympathy for this blivet (he went very personal with me) but, perhaps someone needs to talk to Santa Clara. This stuff is seriously crazy … this is someone who is, well…

    So if anyone from Santa Clara law is reading this thread (and I assume someone monitors Diamond’s shenanigans) it is time to consider some sort of intervention.

    • Steve Diamond

      They know me much better than you do, MacK, and they have gotten used to me over the years.

      • MacK

        Oh I know you well enough to know you are an incandescent asshole. And by the way, on your question of whether my then recently deceased father would be” ashamed of me” – no, but his right hook had taken down better than you. I make a pledge, I will not stalk your children to ask them what they think of you – because that would not be fair, they are burdened enough.

        By the way, I forwarded your charming posts about my father to your dean – what did he say – did he tell you he was ashamed of you? How did you explain those cheap shots? And since you do claim to have studied political science in the UK and Ireland, how do you not know what calling someone a “republican” the way you did means? Are you a fake, a fraud (well yes) but you know that means supporter of the IRA? And since you claim to know my father’s career in detail, it is so impressive that you don’t know that both terrorist groups opposed him – when I was 11 he ended up on the Shankill Butcher’s hit list.

        You know it is a good thing that that nasty cheap shot of yours haunts you. That your dean knows. That every hiring committee knows, that people whose respect you crave know (say Orin Kerr) – and by the way, so many people in Washington DC (think about that) know. Karma is a beast.

        So yes, I know you very well, and yes, you made a serious error. You are a nasty piece of work, but I deal with nasty regularly. As my father would put it, time wounds all heels – the wounding is only getting started….

        Meanwhile, there are free shrinks at Santa Clara, consult one – I’d like you to understand what is happening to you.

        • DW

          “Incandescent Assholes” is going to be the name of my next — oh, never mind.

        • Steve Diamond

          His exact words were, “Steve, when you roll around with pigs in the mud you are bound to get a little dirty.”

          • MacK

            Like Orin Kerr, I think your dean was bing tactfully ambiguous as to who is the pig. Your plaintive complaints on another forum about the interview with your dean also suggests he said much much more. I wonder how he feels after this weeks exchanges made you, and by extension Santa Clara look ridiculous.

            I’m off the the Cato Institute to pick up my stipend….

            • Lee Rudolph

              bing tactfully ambiguous

              Now you’re just cherry-picking.

        • And by the way, on your question of whether my then recently deceased father would be” ashamed of me”

          Say what? Really?

          That’s appalling.

          • MacK

            Yep – he also described my father using the “republican” language that would suggests that he supported the Provisional IRA (i.e., terrorism, which he had opposed his entire career) – doxxing me and using both our names.

            • Ahuitzotl

              Ah. So not just selfinterested self-delusions, but pondscum. Good to know, thanks Mac

            • Wow. I’m sorry.

              Steve, if you’re still monitoring this thread, I would strongly urge you to apologise for this.

              Just based on this thread, e.g., your confusions and confusings below on median, mean, data exclusions vs. central tendency behavior and this report on what is obviously, even on the weakest reading, wildly inappropriate actions, one does not get a positive view of your contribution to the debate and personal credibility.

              Even putting aside prudence and self interest, I trust the moral case for apologising is clear and overwhelming.

              • Steve wrote an email asking me to make an argument for apology and to critique his blog posts. I replied doing both and have not heard back.

  • Gwen

    I’m a little puzzled by Diamond’s assertion about mean annual wages rising faster than inflation.

    The numbers he quotes appear to be using current dollars rather than constant dollars. The BLS statistics don’t mention anything about using a deflator.

    (Link btw, to the 1997 figures, which Diamond doesn’t seem to provide: http://www.bls.gov/news.release/history/ocwage_010499.txt)

    (Rounding) 133000-73000 over 17 years (possibly 16 depending on what time of the year the data was released) is a 60,000 rise, or about 82 percent. But that comes to a fairly measly 3.8 percent per year (being charitable and assuming that here’s really only 16 years).

    But wait, there’s more! While real (inflation adjusted) GDP growth has only been 45 percent from EOY 97 to EOY 14, nominal GDP has gone up 101 percent — which is more than the mean annual wage for
    lawyers!

    (Source: http://www.multpl.com/us-gdp/table/by-year)

    You can’t compare nominal and real numbers; it’s comparing apples to oranges.

    Either Diamond is innumerate, or intentionally lying.

    • DW

      Isn’t “both” a perfectly valid option?

    • Scott Lemieux

      Oh yes, his empirical argument is hilariously wrong; it’s just particularly entertaining that he fails to notice that this particular lie contradicts his conspiracy narrative.

    • Steve Diamond

      I agree that I was mistaken in the use of GDP. I have noted the mistake on my original post. Nonetheless, lawyer incomes have stayed ahead of inflation.

      • Barry_D

        Steve, did you ask BDG to erase comments, or is that just the type of guy that he (also) is?

        • Steve Diamond

          I am not sure of what you are referring to – here?

      • Craigo

        Law school tuition and law school debt have soared above inflation and lawyer income both. How exactly does one do a cost-benefit analysis while excluding the costs?

        • Steve Diamond

          Simkovic and McIntyre cover that question quite well. That was not the point of my blog post.

  • Steve Diamond

    Scott,

    Thank you for the suggestion that I consider median not just mean. Means seem a reasonable pick in this case however because salaries at the low end and high end are by definition excluded. The BLS OES data counts “employed” lawyers so that means partners and solo practitioners are excluded. Nonetheless, I looked at the median too and it shows an increase of 54% (as opposed to a 45% in real GDP) from 1997 to 2014.

    While you can count the output of law schools you have to remember to deduct those that leave the profession. My post simply makes the claim that it does not take a large percentage of lawyers to retire, die, quit to create the openings needed to absorb new JDs. That we have been suffering through an overhang of supply is clear but the idea that it is the fault of law schools makes no sense as I and many others have explained elsewhere.

    With regard to the shared anti-law school agenda of Cato, Koch and folks like Tamanaha and Campos, I suggest you might wish to read my review essay of Tamanaha’s book, Failing Law Schools. I would be happy to consider any substantive comments you might have.

    • sibusisodan

      Means seem a reasonable pick in this case however because salaries at the low end and high end are by definition excluded.

      While I can’t claim to have any significant academic expertise, what little I know is enough to declare that the relationship of this sentence to the truth, or accuracy, is…troubling.

      • Lee Rudolph

        We are talking about downhill ski competitions, aren’t we?

      • Barry_D

        Saying that the median … would be close, and in fact that’s why one would use the median rather than the mean.

    • Paul Campos

      It’s amazing how innumerate you are. Per the BLS numbers you’re citing, the total number of lawyers employed in the US in 2014 is less than the total number of graduates of ABA law schools between 1997 and 2014. Now this doesn’t count solos and partners, but the only way the legal profession could come close to absorbing 45,000 ABA law school grads per year is if there were a tremendous outflow from the profession. To some extent this has happened and continues to happen, but that hardly ameliorates the problem of law grad unemployment — it just moves it around somewhat.

      Even so, at no point in the last 15 years have more than seven of ten of ABA law grads found lawyer jobs within nine months of graduation, even at the height of the mid-2000s boom.

      Looking only at law graduates employed as lawyers to measure the economics of law school is somewhat akin to only looking at tenure track professors to measure the economics of going to grad school.

      • postmodulator

        Looking only at law graduates employed as lawyers to measure the economics of law school is somewhat akin to only looking at tenure track professors to measure the economics of going to grad school.

        This is just to make sure I understand: Is Prof. Diamond arguing that the system works for some people and therefore logically works for all?

        • Barry_D

          “This is just to make sure I understand: Is Prof. Diamond arguing that the system works for some people and therefore logically works for all?”

          Worse. he’s pointing to some for whom it worked at saying that. He never openly states that it works for ‘some’.

      • Steve Diamond

        I estimated exits at around 4% and non ABA entrants at around 2500 per year. Perhaps you missed that when you read my post. Do you think those are wildly inaccurate? If so, please let me know the source of more accurate information.

        If I recall correctly, no more than 60% of all licensed lawyers are employed as lawyers going back a couple of decades which is entirely consistent with your contention about the last 15. But that simply suggests (to me, at least) that law school has never been simply about people earning JDs to become lawyers. If that pattern is accurate and stretches back decades it suggests certainly that law school applicants would have to have been aware of that gap and were ok with it.

        • Malaclypse

          I estimated exits at around 4%

          If exits are 4%, the typical career is just 25 years. Presuming that people get their JD at 25, does the typical lawyer retire at 50?

          • The Temporary Name

            Bar passage in California (and at Santa Clara) seems to hover around 70%. So JD first, then this other thing that is hard.

        • yet_another_lawyer

          “But that simply suggests (to me, at least) that law school has never been simply about people earning JDs to become lawyers. If that pattern is accurate and stretches back decades it suggests certainly that law school applicants would have to have been aware of that gap and were ok with it.”

          How did you come to that conclusion? Law schools were publishing outright fraudulent employment numbers, up until the internet made it possible for victims of the scam to disseminate their stories, and nobody really caught on until 2008 or later. To the extent that it has always been the case that law schools graduate large numbers of people who never became lawyers, then that would suggest that the scam went on for decades– albeit in a much more benign form, when law school wasn’t so cripplingly expensive.

          • Steve Diamond

            The dismissal of court case after court case regarding these kinds of allegations suggests that is not the case. I agree that law schools – not alone in this regard I can assure you – did not do a great job at informing potential applicants about how JDs earn a living. But I remain sceptical that decades of experience with the disconnect between what potential applicants think JDs do and what they end up doing is somehow responsible for the recent imbalance between supply and demand.

            • yet_another_lawyer

              “The dismissal of court case after court case regarding these kinds of allegations suggests that is not the case.”

              Really? So, when the district court held, and the Sixth Circuit affirmed, that Cooley’s job statistics were “objectively untrue” but Cooley won anyway because it was unreasonable to rely on them to tell the truth, that suggests that law schools WEREN’T lying? It’s true that litigants have been unsuccessful, but that’s because businesses that sell legal educations are held to a lower standard than than businesses that sell used cars.

              “But I remain sceptical that decades of experience with the disconnect between what potential applicants think JDs do and what they end up doing is somehow responsible for the recent imbalance between supply and demand.”

              In the pre-internet era, how would the pre-scam marks ever find out the results of the post-scam marks? Is it strictly coincidental that once the law school transparency movement started, demand cratered?

              • Steve Diamond

                How did anyone, investor, consumer, law school applicant ever learn anything without the Google??

                • yet_another_lawyer

                  Most applicants probably started with those “objectively untrue” law school employment statistics. Hopefully they were aware that a circuit court would later rule that it was objectively unreasonable to rely on a law school to be honest.

              • Scott Lemieux

                Is it strictly coincidental that once the law school transparency movement started, demand cratered?

                Of course! Why, next you’ll be suggesting that the Affordable Care Act was a causal factor in the rapid decline of people without health insurance.

                • I wonder if this decline would lead to more successful suits in the future. It’s pretty good evidence (if you can convincingly tease out any potentially confounding factors) that specific sorts of ignorance was a strong factor in many decisions to go to law school.

            • MacK

              The blivet Diamond – who by the way, seems to make a point of editing Wikipedia to make dishonest post loves to say courts dismissed the fraud cases. The trouble is Diamond is notoriously dishonest. In most of the cases the courts acknowledged that the law schools had presented information that was wrong and in a few said the law schools lied, but then said that this was to use a legal expression “puffery” and then invoked the principle of caveat emptor. When Diamond talks about Santa Clara, he relies on the general puffery principle too, and in general about legal education, on caveat emptor. That is why he thinks being dishonest is OK.

              • Steve Diamond

                I wouldn’t even know how to edit Wikipedia even if I wanted to. Your other contentions have been addressed in depth on my blog.

                • MacK

                  Oh horspucky – nothing is addressed in your blog other than what you choose to address, in edited form.

                  You are genuinely an awful person – that pretty well everyone knows. But the interesting thing is that you think you have a license to be dishonest. Frankly, I’m glad that it is biting you on the ass.

            • Barry_D

              “The dismissal of court case after court case regarding these kinds of allegations suggests that is not the case.”

              Yet another lie. John Yoo remains a barred lawyer; massive violations of the Fourth Amendment have only resulted in the prosecutions of those who leaked it.

            • Morse Code for J

              I have never burned anyone in effigy, but if I were to start, you would be as good as any and better than most.

              When I did my research in 2006-07, I was stupid enough to believe U.S. News and the representations made by schools in their literature that a law school saying that 90% were employed within 9 months of graduation with a median salary of $100,000 meant that 90% were employed within 9 months of graduation with a median salary of $100,000. It never occurred to me that the 90% covered those who reported any sort of job, legal or not, plus 25% of those whose employment status was unknown under an assumption that they were too busy working. It never occurred to me that the $100,000 median salary was an artifact of an unrepresentative minority who reported a $100,000+ or working in a place known to pay a certain market rate, instead of the whole class of employed persons whose salaries were simply factored out of the median if they went unreported. It never occurred to me that a law school might go to great lengths to make it seem as if almost all of their graduates got great jobs practicing law or something equally remunerative when maybe half did, because that would be false advertising for any other fucking business. The only thing about which my law school was up front was the amount that it cost every semester.

              Thanks to my life before law school, I had an escape hatch that led me back to the federal government, where my salary and PSLF will hopefully be enough to retire my debt by the time I am 50 years old (unless my million dollar JD premium materializes soon). Fuck you and your misplaced outrage.

        • DW

          Mr Diamond,

          If I recall correctly, no more than 60% of all licensed lawyers are employed as lawyers going back a couple of decades

          Could you tell me what the definition used for “as a lawyer” is? Would this be analogous to “JD/bar passage required”, or would it include “JD advantage” jobs? (And, while we’re on the topic, could you point me to a good definition of “JD advantage”?) Also, have you crunched the numbers to see what happens if you use either “graduated law school” or “passed the bar” in place of “licensed “?

          Thanks

          • Steve Diamond

            You can see for yourself on the BLS OES website. Here.

            • DW

              I realize that I asked you a number of questions, but how exactly does something the BLS published answer the question of whether you yourself have run the numbers for different definitions of “lawyer”?

              ETA: like many .gov sites, the BLS page renders horribly on my phablet. I’ll take a look later, possibly over the weekend.

              • Steve Diamond

                I don’t understand your question. I just used the lawyers category as provided by the BLS. That category excludes solo practitioners and partners. I did not “run” any numbers.

                • DW

                  If I recall correctly, no more than 60% of all licensed lawyers are employed as lawyers going back a couple of decades

                  My questions are largely centered around this claim.

                  Before I got a chance to look at the BLS page, which finally sort-of rendered on my phone, I was under the impression that the data on it was more granular than it apparently is. I thought that I’d be presented with the ability to compare jobs identified as “JD + bar passage required” with “JD advantage” labeled-jobs. Looking at the subset of law school graduates labeled “lawyers” and drawing a conclusion about employment prospects of law school graduates as a whole seems iffy, to say the least. ISTM that the BLS stats are much more applicable to the subset of graduates who find jobs as “lawyers,” however the BLS defines “lawyers.”

                  (Also, even if you’re just cutting and pasting out of the BLS data, you are doing some level of analysis on the data; you’re certainly making claims about what the data show.)

                • DW

                  Prof Diamond, could you tell me where your 60% figure comes from? I’ve been looking through your site, but to be honest, there’s a bunch of “S&M” stuff on there and I’m getting false positives searching for “60.”

                  I’ve made it home and will be able to look at the BLS stats in a more comfortable environment. I’ll see what I can come up with.

        • BoredJD

          Steve, describe what you think the median law school applicant does in terms of research before deciding to (1) take the LSAT, (2) apply to law school.

          If you asked a class of 100 1Ls in 2007 what they thought the median law school grad earned 1 year out, what do you think they would say?

    • Manju

      Steve, these look like weird numbers.

      The most straighforward metric would Real Medium Income for lawyers from 1997-2014. That would be income controlled for inflation. Is that what this is?

      Or are you talking nominal? Are you comparing nominal increases in medium/mean income to the real GDP?

      • Steve Diamond

        The BLS data appears to be nominal (they don’t say but they do say it is based on a survey so I assume people are reporting to them in nominal dollars). Thus one cannot compare this to real GDP and I have corrected that point on my post. But lawyer incomes did increase – at both the median and mean – and stayed ahead of inflation. And we have to keep in mind that the BLS data excludes partners so that leaves out the highest income levels. In my county the mean income for non-partners is 200,000 p.a.

        • postmodulator

          Isn’t the critical point that lawyer incomes increasing doesn’t do any good for law school graduates who have not been able to get work as lawyers?

          • Steve Diamond

            How unemployed and underemployed JDs who want to be lawyers can improve their circumstances in the near term is not clear from this data. If lawyers as an occupational group have absorbed more of societal resources than other groups there might be an incentive to shift it downward to those kinds of JDs. This could include expanded opportunities but it would likely require a lot of effort by the bar to get it to happen. I think the law school jobs programs – much maligned here I know – were a partial effort to do this.

            • Barry_D

              “How unemployed and underemployed JDs who want to be lawyers can improve their circumstances in the near term is not clear from this data.”

              And Diamond walks slowly backwards from the original argument, which is about what percentage of JD’s are unemployed/underemployed.

        • Manju

          Ok…so I did a quick and dirty analysis. I used mean, just because it was available.

          In 1997, Mean Annual Income was $72,840. In 2014 dollars that’s $106,712.

          So Income has gone from $106,712. to $139,110, beating inflation but under-performing GDP.

    • yet_another_lawyer

      “Means seem a reasonable pick in this case however because salaries at the low end and high end are by definition excluded. ”

      Would you kindly share your definition of “means” with us, please? If there are ten law graduates and one is making $10,000,000 a year at Skadden, one is making $100,000, and eight are making $30,000 a year, then the mean is just over a million bucks. The median is $30,000. Now, how are the high and low end by definition excluded in the former calculation? Thank you in advance.

      • The Temporary Name

        I think this is the answer:

        Means seem a reasonable pick in this case however because salaries at the low end and high end are by definition excluded. The BLS OES data counts “employed” lawyers so that means partners and solo practitioners are excluded.

        My theory is that “by definition” really refers to the BLS data set.

      • Steve Diamond

        You can review the detailed explanations at the BLS website. It is easily accessible online.

        But keep in mind these numbers are for “employed” lawyers so that excludes partners. That suggests the numbers may be on the low side, at least in places like NYC or the Valley. So your Skadden example would mean the 10 mn a year lawyer is not included in the database.

        The numbers also excludes solo practitioners. That might exclude some of the 30K but we don’t know.

        • postmodulator

          You can review the detailed explanations at the BLS website.

          This is insufficiently precise. Like, you mean these numbers, right? If they’re discarding outliers to come up with those means, I’m missing where they’ve said so.

          • postmodulator

            I see below that what you mean is that partners don’t count, so the highest earners are excluded. You had said, though, that the highest and lowest earners were excluded.

            • Steve Diamond

              Partners and solo practitioners are excluded. I tend to think solos are made up of many more low earners than high earners and I think the uptick in solos of late is because of the attempt by recent JDs – who are usually low earners – to try to create a career path (as two of the graduates to 2010 profiled in the NYTimes have done apparently successfully).

      • ColBatGuano

        I still don’t get it.

    • Means seem a reasonable pick in this case however because salaries at the low end and high end are by definition excluded.

      This is easily shown untrue by…the original post:

      I’m sure the next Santa Clara Law grad to get a job at Starbucks will be happy to know that he and Howard Schultz have a average (mean) income of more than $10 million a year.

      Let’s be generous and give the barista a $40k, no, $50k annual salary. Schulz’s is $21,775,001, so the average is…more than $10 million. But there’s only two so the high and low are…not excluded. But let’s add ANOTHER barista, so (50000+50000+21775001)/3 =$7,291,667…no exclusions.

      I think what you meant was that in a normal distribution there are roughly equal numbers at either end so they…cancel out? But….no? There’s a lower bound but no upper bound.

      The key idea of considering the median is that its (more) resilient to right skew, whereas means are not. (I prefer quintiles and at least the 99% for many things.)

      • Damnit! yet_another_lawyer beat me :)

      • postmodulator

        I think what you meant was that in a normal distribution there are roughly equal numbers at either end so they…cancel out? But….no? There’s a lower bound but no upper bound.

        Maybe he means that, but what reason is there to think that there’s a normal distribution here? If he genuinely thinks every data set has a normal distribution just by virtues of its being a data set…

        • Barry_D

          Salary distributions rank rather low on my list of places to find a normal distribution, speaking professionally.

      • Steve Diamond

        The BLS data excludes the highest earners by definition (no partners). In any case the medians rose by 54% over the same time period. And lawyer incomes stayed comfortably ahead of inflation (even without using partner incomes).

        In any case I have conceded that the market power argument remains unresolved.

        • The BLS data excludes the highest earners by definition (no partners).

          But…this is not a function of the definition of “mean”. The data set in question is the BLS data that excludes the highest earners in the total population…but then mean vs. medium *on the BLS data* does not exclude the high and low ends *of the BLS data*.

          If that data skews right*, then median is still the better choice because it is *less sensitive* to such skew. See the example.

          • Steve Diamond

            I don’t disagree. And median income has also beat inflation tho not by much.

            • Oops, didn’t see that before I wrote my comment below.

        • In any case the medians rose by 54% over the same time period. And lawyer incomes stayed comfortably ahead of inflation (even without using partner incomes).

          Cumulative inflation for that period is 47.02%. So this is 7% ahead of inflation. That’s 7% over the whole period and thus ≈+0.5%/year. Is that “comfortably” ahead?

          Note that while median is better than mean, it also is vulnerable to various distribution shapes. For example, there might be a cliff at around 48% so this doesn’t tell you much.

          But also, inflation is a crude measure. For example, if lawyers have costs that rise faster than inflation (e.g., law school debt), that might erode the salary advantage above inflation.

          • Scott Lemieux

            But also, inflation is a crude measure. For example, if lawyers have costs that rise faster than inflation (e.g., law school debt), that might erode the salary advantage above inflation.

            And, of course, as Paul says above the whole question is relevant only if you actually get a job. Basically, all the fact that salaries for lawyers with jobs are holding steady reflects is something not in dispute: going to one of the very best law schools in the country is a sound economic investment.

            • Yes, I was going to mention that there could be other reasons why the median lawyer salary might outpace inflation without it being evidence of strong demand for additional lawyers. There are many many possibilities (eg the existing lawyer pool works longer or gets more productive or there’s a guild like structure that makes effective entry harder). It’s not hard to find analogous situations: tenure track salaries haven’t collapsed in spite of an oversupply of PhDs and insane competition AND a willingness to use cheap labor.

              But yeah, if you have direct evidence that lawyer consumption is lower than production, indirect measures don’t help.

    • DrDick

      I see you flunked basic statistics (as well as 8th grade math).

  • NewishLawyer

    I wonder if legal employers are also unhappy about the talent out there. Every now and then, I will see an ad for an associate ad and then see the same ad reposted a few times over the course of a few months.

    • Barry_D

      “…and then see the same ad reposted a few times over the course of a few months.”

      I’ve seen that everywhere, including jobs for which I interviewed – BTW, the standard business method of telling you that you didn’t get the job was to repost the add. Sending even a form e-mail would demand too much from these people.

  • Steve Diamond

    DW: 60/40 data here.

    • DW

      Thanks! I’ll take a look at it.

    • DW

      A few quick initial notes; otherwise I think I’ll be falling into a rabbit hole.

      Comparing the ABA’s “licensed lawyers” to BLS’s “lawyers” (I assume we’re talking code 23-1011 here; at least the numbers on the graph seem to line up with that category) is an interesting choice. I’ll have to dig into how the ABA and BLS define “lawyers” (differing data sets and all) but it is interesting to contemplate the difference between the two. Are there people counted in the BLS stat as “lawyers” who aren’t in the ABA’s “licensed lawyers”? We know that partners and sole practitioners won’t show up in the BLS stat but will in the ABA’s (hopefully!), but where are the other “licensed lawyers” who don’t show up in the BLS? Are they gainfully employed and showing up in other BLS categories (code 45-9560, “Prostitutes, bloggers, and other ne’er-do-wells”)? Retired? Long-term unemployed?

      Now, i think these are all interesting questions, but what do the BLS and ABA stats tell someone contemplating law school? As of now, I’d say that the BLS stats presented mean very little. Limiting analysis to those law school grads (some of many years past) only tells informs us about the subset of law school graduates who are working as lawyers. It tells us nothing about those who aren’t BLS “lawyers”; it tells us nothing about the “failure modes” that those outside the subgroup “BLS lawyers” encountered; it tells us nothing about the relative frequency of law school grads encountering those “failure modes”.

      The post brings up Simkovic & McIntyre a good deal; I’ll have to go back and read it more in depth since there were a number of specific references to it in the post. I have to admit that when it first came out, I didn’t think much of the concept that “a law degree” had a specific net worth. I’d have thought that there’s enough of a variance between the outcome for the average student at HYS and the average student at a Thomas Jefferson/Cooley that such predictions would be meaningless. And the fact that it was trumpeted by a number of staff from admittedly non-T-14 schools got my Spidey-senses tingling. I mean, if you held an acceptance letter from Hastings in one hand and one from Boalt in the other, would you choose by flipping a coin?

  • Steve Diamond

    I’ve prepared a primer on this that you can read here.

  • Peterr

    From the first link in the post above:

    Barry, We at Santa Clara, a Jesuit law school, try to do a different job of legal education than Stanford. I have explained this in several other places. It should not be a surprise that our outcomes differ. If we had taken the Stanford path thirty years ago, when the modern era SCU law school was begun, we might produce the cookie cutter lawyers that schools like HYS produce.

    Posted by: Steve Diamond

    As a religious professional (and not a lawyer), I know a fair number of Jesuits. Jesuits are friends of mine. You, sir, are no Jesuit.

    The quality of your logic betrays you quite quickly.

  • observer

    “In the longer run I believe the intent [of law professors such as Merritt and Tamanaha] is to undermine the rule of law itself.”

    Like Professor Diamond, I am concerned that certain rules of law are being undermined.

    Specifically, I would like to see the following rules of law taken seriously and enforced, not ignored, gamed and undermined, as they are now.

    First, I’d like to see law schools lose their eligibility to take federal student loan money when their cohort default rates exceed the legal thresholds in the H.E.A., instead of that rule being gamed in the favor of law schools by terming a loan with an IBR and/or PAYE $0.00 monthly payment for 270+ days “current” rather than “defaulted.”

    Second, I’d like to see the recently acknowledged, H.E.A.-created, fiduciary duties of higher ed. institutions that forbids them from publishing misleading placement data enforced, as it was enforced against Corinthian Colleges.

    Third, I’d like to see the ABA actually audit placement data published by all schools.

    Fourth, I’d like to see the ABA enforce the minimum bar passage rate rule that is part and parcel of accreditation and hence of the ability of schools to receive federal student loan funds.

    And lastly, I’d like to see the Dept. of Ed. respond to FOIA requests for repayment data of loans made to law school graduates and others by releasing that data as they should.

    You with me, Professor Diamond?

    • UserGoogol

      There’s nothing wrong with non-payment under IBR/PAYE. Education should be free and paid for with taxes. In the meanwhile, education being paid for with loans that people have an increasingly nominal obligation to pay back is a good compromise.

      Of course, if someone’s qualifying for $0 payments over 270 months they’re certainly experiencing significant financial hardship, and to the extent that law school claims to be about getting fruitful employment in the legal industry then it’s reasonable for law schools to be held liable for that. But it’s not default.

      • UserGoogol

        Um, days not months. 270 months would be… far more problematic.

        • observer

          A couple things. IBR/PAYE is not the equivalent of “free” or “nominal” obligation, it’s just a bookmark until you start making some real money, at which point, with accumulated interest your law degree is now much more expensive. In this scenario, the poor who manage to get ahead, pay the most of their law degree. Reverse Robin Hood, ruined credit, financial repression. IBR/PAYE is hardly back-door, “free” public education.

          If a poor graduate (me) doesn’t ever manage to make enough money to pay back the increased cost from IBR, then what was the law degree worth to me? Was I benefited financially by it? I.e. if my loan balance is ever forgiven under IBR who made out like a bandit? Me or the school?

          You’re correct that an IBR/PAYE at $0.00 for 270+ days is not a “default,” but that is just semantics. It’s only not a “default” because the Dept. of Ed. declines to call it such.

          In no way does debt relief to the students preclude counting such loans as “defaulted” in the cohort default rates for schools.

          We see what happens when the policy-maker, Dept. of Ed., games its own quality control rule: Corinthian Colleges happens. They had quite high default rates even with IBR/PAYE being available on some loans, and they were shot through with fraud because there as an opportunity to take federal money without enough risk to the school.

          When you’ve got students graduating and immediately being so poor they cannot afford anything but a $0.00 monthly payment, with a mountain of debt for the cash that flowed to schools, there’s a question whether those schools should be publicly subsidized at all.

          I know who’s getting ‘bailed out’ by this present arrangement of laws, and it ain’t me, or any other unemployed or underemployed, new lawyer.

          Last question: if you were emperor and you could create taxpayer subsidized, free higher education, how much would you give a law school to educate a student? Would it be 100,000? 150,000? 250,000?

          • UserGoogol

            Technically that’s true of all default. Default is failing to meet the terms of your repayment agreement. If the terms of your loan allow you to not pay, then it’s not default. Semantics is all there is.

            But I mean yeah you’re not wrong. I’m optimistic enough to view PAYE as just the predecessor to the inevitable full-scale reform of higher education financing, but yeah it’s not exactly an ideal system to help out graduates in the meanwhile. I just think framing things the way you do focuses on the wrong issues.

            • observer

              Ppff, okay, cite to me a the commercial promissory note that adjusts its obligation for repayment to be “income contingent” and forgives the balance after X months of successive $0.00 payments! Sign me up for that credit card! It’s bullshit. It’s not bullshit in my favor, it’s bullshit to keep the status quo going until someone finally acknowledges that nobody can afford the damn cost.

              DOE changed the terms of my promissory note(s) and they’re doing it again by expanding IBR by administrative rule.

              Sorry, I’m not stupid, and I know full well expansion of IBR is not for debtors – it’s for the sake of maintaining the status quo and masking financial distress to keep money flowing to schools and students officially on the hook for it.

              Ironically, Diamond is right about one thing: there’s big money involved in higher ed and it buys politicians.

              I refuse to be a political pawn. If someone actually had the balls to tell me – ‘don’t worry IBR on an outrageous price this is all a back door to free higher ed…you know, using the knife to your neck as the bargaining chip’- well I’d defend myself by any means necessary and proportional. But frankly, much like I don’t believe the ACA was a precursor to single-payor, I also don’t believe that the federal government gives a flying * about students. The feds have good intentions is one hell of a hard sell. Not terribly believable. Just watched in detail as the DOE tried to fuck over terribly and seriously defrauded Corinthian students.

              • Unemployed_Northeastern

                $0.00 payments on IBR and PAYE do not count towards forgiveness, from what FA pros tell me.

                • observer

                  Do you mean that a $0.00 monthly payment does not count in the number of on-time monthly payments for IBR forgiveness or that they don’t count towards PSLF?

                  A $0.00 payment does count for IBR forgiveness.

                  “(f) Loan forgiveness.
                  (1) To qualify for loan forgiveness after 25 years, the borrower must have participated in the income-based repayment plan and satisfied at least one of the following conditions during that period—
                  (i) Made reduced monthly payments under a partial financial hardship as provided in paragraph (b)(1) of this section, including a monthly payment amount of $0.00, as provided in paragraph (b)(1)(iii) of this section;”

                  https://www.law.cornell.edu/cfr/text/34/682.215

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