I don’t want to fill up the cyberpages of LGM with sordid academic squabbles, but I also don’t want to let Steve Diamond quote me in a fraudulent way without making a record of it. Posted as a comment on Taxprof:
Stephen Diamond is a very dishonest man. Diamond does not link to my LGM post he quotes. This is not merely a matter of netiquette, because he quotes me in a way that intentionally hides the fact that my major criticism of him has nothing to do with his quibble regarding the minor point I made in the part of the post he does quote. He is intentionally misquoting me, and in such an egregious way that his behavior is a form of academic fraud. (ETA: Warren Terra in comments suggests that the phrase “academic fraud” shouldn’t apply to this context — a blog post — even if Diamond is behaving in a way that would be academic fraud in a more formal context. I’m of two minds about this).
Here’s what I wrote:
Let’s go to the numbers. Diamond cites Bureau of Labor Statistics occupational employment stats for his claim that incomes for lawyers “have increased steadily for at least two decades.” That’s a very misleading statement, for two reasons, one relatively minor, and the other not minor at all. The relatively minor reason is that, adjusted for inflation, median salaries (a crucial term, as we’ll see shortly) for lawyers have been essentially flat since the mid-1990s, which is as far back as the BLS stats go: adjusted for inflation, the median salary for lawyers has increased by less than 5%, from $110,000 to $115,00. That’s approximately half the wage growth experienced by the average American worker over the past two decades — which, needless to say, have hardly compromised a banner era for American workers in general.
Note that Diamond removes the bolded portion of the paragraph, for reasons that will soon be painfully evident.
Diamond’s complaint is that I compared growth in median lawyer salaries with growth in mean worker salaries. That is a fair point as far as it goes, but it doesn’t go very far: median salaries of all workers still increased more in percentage terms than median salaries of lawyers, and in any case this is all a distraction from my main initial point, which is that the earnings of salaried lawyers have been, as I said, essentially flat. (Diamond claims that a five percent cumulative growth rate in salaries over 17 years means salaried lawyers are staying “comfortably ahead” of inflation. Over this same time frame, Diamond’s employer increased sticker tuition for Diamond’s students by 60% in constant dollars. I wonder if Diamond’s students think that raising tuition 12 times faster than the growth rate in lawyer salaries constitutes a “comfortable” rate of growth for the cost of a Santa Clara law degree?).
But as I said in the original post, my initial point was a minor one, because Diamond’s claims about lawyer earnings are actually far more misleading. My main point, which Diamond hides from any readers he might have by distorting my text via elision, was this:
But, misleading as that part of Diamond’s statement is in context, that’s a minor point in comparison to another one, which is that the BLS wage statistics Diamond cites don’t include self-employed workers. How important is this omission when calculating the actual compensation of lawyers? (Let alone law school graduates, which is a very different category).
Consider that 75% of American lawyers are in private practice, and the large majority of those people are self-employed, either as individuals or in partnerships, meaning that they’re not salaried or hourly workers, and thus not included in the BLS wage stats. Diamond is aware of this, and thinks it means lawyers are making even more money than the BLS stats suggest:
Now, these numbers are “employed” lawyers so they do not include solo practitioners or partners who qualify as employers. But the first number is relatively small, approximately 4% on average of all practicing lawyers over that time period. And the second number is likely to skew income higher not lower, so excluding that number does not help the critics case that much. Arguably solos do less well financially (though we don’t know for sure based on the BLS data) so perhaps they cancel each other out.
Factor in higher paid partners and [it’s] likely they [lawyers] have stayed comfortably ahead of inflation.
Steve Diamond, a man who pontificates regularly on the economic status of lawyers, thinks that 4% of practicing lawyers are in solo practice. He produces this estimate by citing NALP data on the employment status of law graduates nine months after graduation. But many lawyers — perhaps most — graduated from law school more than nine months ago. How many of them are in solo practice? According to the ABA, the answer is roughly two out of every five, i.e., approximately ten times as many as the learned professor estimated. And what’s happened to their wages?
Fortunately, we don’t have to guess: the mean earnings (the median is certainly much lower) of solo practitioners have declined by 30% in real terms over the past 25 years, from $71,000 to $49,000 per year, inflation-adjusted.
In other words, if we combine the BLS data on median lawyer salaries with tax data on the earnings of self-employed lawyers, we find that the median real compensation for lawyers – again, not law school graduates, but actual employed lawyers — is surely a good deal lower than it was a generation ago.
As is evident if one actually reads it, the main point of my post, as I emphasized at the time, was that, contrary to the assertions of Diamond and Michael Simkovic, the median earnings of lawyers (not just salaried lawyers) have decreased over the period covered by BLS data, because almost half of all lawyers in private practice are solos, and their income has decreased markedly over this period.
Looking at the actual post would also reveal to readers that Diamond’s analysis of lawyer income was so radically off the mark because, absurdly, he used the employment status of new law graduates to estimate how many lawyers are solos
: a figure which he then proceeded to underestimate by 825%, when the real figure is 825% higher.
Imagine if Donald Trump claimed that affirmative action was destroying the career prospects of white men in America, and cited the “fact” that in America today only 4% of 25 to 29 year old white men have college degrees. If it were then pointed out to him that the real figure is 37%, would you expect him to give up on his pretensions of being an expert on the subject, and slink away quietly?
Of course not: what you would expect would be for Trump to then misquote his critics, while throwing rhetorical dust in the air and brazenly ignoring the fact that he had been exposed as someone who has no idea what he is talking about. But at least Santa Clara law students aren’t paying $75,000 per year for the privilege of having that particular lying blowhard spout ignorant nonsense at them.