View Bill Henderson's original article here. Posted by LST on June 29, 2012.

Excerpt:

In a few short years, [the ABA's new employment] data are going to fundamental reshape our industry. The changes will make the industry better and stronger, but the journey to this better place is going to painful and disorienting for all law schools—that’s right, even the elite national law schools will be affected.

This is worth explaining in very simple and concrete terms. The Class of 2011 employment data consists of 134 variables on 200 ABA-accredited — 26,800 discrete data points, which is enough fill a phonebook. For a long time, the policy of the ABA was to do just that – publish a phonebook of data in the form of the ABA-LSAC Official Guide to Law Schools. Well, decisions on where to attend law school are not free. They require time and effort. When a prospective student has to wade through a phonebook to assemble relevant data to make important decisions, many (most) will forgo the exercise altogether.

This has two very important effects:

• The quality of enrollment decisions goes down because, from the student perspective, the costs are too high. That’s error #1. But it is forgivable—decisionmaking is a skill taught in a top-notch legal program, not a prerequisite for applying.
• To simplify their decisions, students gravitate to U.S. News ranking, which is a compact 4-page table that contains easy-to-understand comparative data.

Yes, the U.S. News has serious flaws; and every year, overreliance on them produces tragic consequences in the form of excessive student debt. Now, with the ABA employment “phonebook” in spreadsheet format, those a with modicum statistical skills and an internet connection can analyze, simplify and publish relevant statistics that will better inform the decision to attend law school.

Consider the chart below:

When I created with this simple pie chart, I started with a simple premise: If I am applying to law school, my minimum hope is that nine months after graduation I will be able to obtain a full-time, permanent professional job. The phonebook has three columns of data that speak to this hope:

• Bar Passaged Required Jobs, FTLT (i.e., Full-time, Long-Term)
• JD-Advantage Jobs, FTLT
• Professional Jobs, FTLT.

All the other myriad data columns, parsing things by part-time, short-term, non-professional, unemployed, unknown, etc., do not meet the minimum hope. So they are lumped together as “Other Outcomes.” Clearly, for 1/3 of the Class of 2001, their full-time, permanent professional ambitions have not yet materialized.

A reasonable next question is how these figures vary by U.S. News rank. The answer is reflected in the chart below.

Some observations:

• Least surprising. The outcomes are better at “national law school”–almost 90% are FTLT professional jobs. I used the T14 cutoff because the composition of this group has not change in two decades of U.S. News rankings. Few people would disagree that these schools have strong pull among legal employers.

• Most surprising. There is a whole lot of Purple–i.e., “Other Outcomes”–throughout Tiers 1, 2, 3, and 4. For over 90% of law schools, this is a very challenging legal market.

• Biggest reality check. The JD-Advantaged and Professional jobs appear to be, on balance, less desirable than those requiring bar passage. They increase nearly three times in relative proportion as we move from T14 to Tier 1 to Tier 2. Many are likely compromise jobs—not as good as practicing law, but better than non-professional alternatives.

With these relative benchmarks in place, a prospective law student can look for law schools that are outperforming their U.S. News rankings. And there are quite few.

For example, in Tier 4, St. Mary’s (Texas) has 78.3% Bar Passage Required placement; Mississippi College’s figure is 75.3%; and Campbell (NC) is 71.4%. These schools aren’t feeding BigLaw, but their graduates appear to be full-time practicing lawyer nine months after graduation. What accounts for their success? Most of their graduates are probably in cities and towns far away from corporate practice. Nonetheless, these schools have a clear niche they are filling.

In contrast, there are 20 schools in Tiers 1 and 2 that have less than 50% Bar Passage Required jobs. What do they have in common? Many are in big cities in the Northeast and Mid-Atlantic or California–large urban markets that are attractive for young professionals. It is likely that too many young lawyers are chancing after a finite set of legal jobs. It is worth noting, however, that these same schools also have rates of placements in JD Advantage and Professional jobs that are higher than other law schools at statistically significant levels.

So many young law graduates are voting with their feet. Better to stay in the city as a non-lawyer professional than to move to south to be country lawyer doing small firm practice. Although I suspect a large proportion of these grads will fare quite well, it is important to keep in mind that JD-Advantaged and Professional jobs are not a panacea—they are also in short-supply. At most schools in Tiers 1, 2, 3, and 4, between 30% and 42% of graduates are either unemployed and underemployed in jobs that are either nonprofessional, part-time, or short-term. Indeed, 4.3% (1,874) of all jobs for the Class of 2011 were funded by the law schools themselves!

As I have said previously (here and here), the current legal job market reflects a structural change in the legal sector—these numbers aren’t going to turn around in a year or two.
So what is going to happen? Notwithstanding the heady optimism of the “Kaplan kids“, the ABA employment data, thanks to the blogosphere, is going to reduce information costs, making it easier for prospective law students to determine whether law school is a good investment. The needle is going to move, just not as fast as a Chicago School economist might predict.

Further, expect students to aggressively negotiate for scholarship money. Whether schools become more generous in merit aid, admit fewer students, or both, all signs point to shrinking budgets for law schools.

The utter transparency of a changing and stagnant legal market has potentially more dire consequences for law schools. The lifeblood of the entire legal education establishment, including elite law schools, is federal student loans. Our students get the same generous terms as graduates of medical and dental schools, who are not struggling to make six figure incomes. The graphs above suggest that a large proportion of our students will be on Income-Based Repayment (IBR), which is – functionally – insurance in the event a high income fails to materialize in the years following graduation. The downside risk of that insurance – lack of repayment of expected principal and interest—is borne by U.S. taxpayers.

Right now, it is possible to estimate the size and probability of this downside risk. All the Federal Government has to do is add-up the shortfall between the repayment of principal and interest in normal repayment versus the monies actually being collected. What percentage of graduates are on IBR? What portion of their current principal and interest are they able to pay? These are simple numbers that some enterprising journalist will eventually request. Further, they are legitmate public policy questions that we, the legal academy, should face long before the journalists get there.

Lawyers and law schools are not a favored interest group on Capitol Hill. We need to plan for the extremely high probability that the financing of law schools will be dramatically altered in the years to come. The longer we wait, the more painful and disastrous the transition. Every law school will need a damn good story to justify continued federal loans. And right now, many of us lack that story – being in Tier 1 or T14 (where debt loads tend to be the highest) won’t mean anything if the math falls short.

In summary, our ivory tower is crumbling. With the ABA putting the employment data in downloadable format on its website, law schools will have to do something completely new and scary to us—we are going to have to compete to keep our jobs and stay in business. The litmus test is going to be the ability of our graduates to obtain remunerative professional work in a highly competitive global economy. This is very serious work.

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LST's Take:

This has been reposted in (almost) its entirety with permission from Professor Henderson.

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Following our success in collecting NALP reports from schools last year, we are asking schools to now make their reports for the class of 2011 available.

For the class of 2010, we managed to collect 50 NALP reports. These reports helped us expand our data clearinghouse so that we could become the place to go for the most thorough and easy-to-compare employment information. This year, our goal is to double the number of reports we collect.

Even with the improvements to law school transparency, thanks to immense pressure on the ABA, these reports contain helpful data that schools are not required to be make public.

• Salary Data (aggregated in categories)
• Job Source (e.g., OCI, networking, direct mailings)
• Job Offer Timing (before graduation, before bar results, after bar results)
• Job Status (employed graduates who are still seeking or not seeking)
• Job Region and Job States
• Job Type Breakdowns by Employer Type (e.g., government JD Advantage)

Check out Seattle University School of Law’s Class of 2011 NALP report, which the school sent to us unprompted, to see what schools have to offer this year.

We hope that schools share our sense of urgency and help us put comparable employment information into the hands of consumers. Check out the full letter after the jump.

(more…)

• LST's Request Letter

LST’s Press Release:

Mister Hart, here is a dime. Take it, call your mother, and tell her there is serious doubt about you ever becoming a lawyer.
- Kingsfield, The Paper Chase

The ABA has released Class of 2011 job outcome data for all domestic ABA-approved law schools. The data are far more granular than ever before. Law School Transparency has analyzed the data and made the school-specific data available on its website for easy comparison.

The ABA data shed considerable light on how poorly the 2011 graduates fared. We can now say with certainty that the employment picture is far worse than previously reported. Only 55.2% of all graduates were known to be employed in full-time, long-term legal jobs. A devastating 26.4% of all graduates were underemployed.

According to the ABA data from 195 law schools:

Full-time, Long-Term Legal Jobs:

• These jobs require bar passage or are judicial clerkships and are for at least 35 hours per week and have an expected duration of at least one year.
• The national full-time, long-term legal rate is 55.2%.
• At 73 law schools (37.1%), less than 50% of graduates had these legal jobs.
  • 30 schools (15.2%) had less than 40%
  • 10 schools (5.1%) had less than a 33%
• 89 schools (45.2%) exceeded the national rate of 55.2%.
  • 31 schools (15.7%) had more than 67%
  • 19 schools (9.6%) had more than 75%
  • 5 schools (2.5%) had more than 90%

Underemployed:

• We define a graduate as underemployed when he or she is “Unemployed – Seeking”, pursuing an additional advanced degree, in a non-professional job, or employed in a short-term or part-time job.
• The national underemployment rate is 26.4%.
• 180 schools (91.4%) reported a rate greater than 10%.
  • 144 schools (73.1%) had more than 20%
  • 109 schools (55.3%) had more than 25%
  • 57 schools (28.9%) had more than 33%
  • 20 schools (10.2%) had more than 40%

Large Firms (at least 101 attorneys):

• 10.7% of graduates were employed at large firms in full-time, long-term positions
  • Graduates seek these jobs in part because they’re the jobs that tend to pay the highest salaries.
• At only 45 schools (22.8%) were more than 10% in these jobs.
  • 20 schools (10.2%) had more than 20%
  • 15 schools (5.6%) had more than 33%
  • Only 3 schools were over 50% – Columbia, Northwestern, and Penn.

Law School Transparency’s executive director, Kyle McEntee, urged caution to students planning to enroll this fall. McEntee said, “Law school still costs way too much money compared to post-graduation employment outcomes. If you plan to debt-finance your education or use your hard-earned savings, seriously think twice about attending a law school without a steep discount. For the vast majority of prospective law students who have not received an extensive scholarship, it will make sense to wait for prices to drop.”

There has been some speculation that the class of 2011 may represent the bottom, though this view is grounded more in optimism than evidence. Rather, evidence points to a structural shift in legal employment, especially at the entry-level, that signals a new normal far below pre-recession levels. Technology, globalization, and law firm strategies are substantially changing our profession.

To view every ABA-approved law school’s profile, visit http://www.lawschooltransparency.com/clearinghouse/.

To view comparison charts, visit http://www.lawschooltransparency.com/clearinghouse/?show=compare&sub=jobs

Established in 2009, Law School Transparency is a nonprofit legal education policy organization. Our mission is to improve consumer information and to usher in consumer-oriented reforms to the current law school model. We operate independently of any legal institutions, legal employers, or academic reports related to the legal market.

The National Law Journal (NLJ) released its annual report this weekend on the law schools that send the most graduates to the 250 largest American law firms (NLJ 250). In this post we’ll answer a few basic questions about this important employment outcome measure. This is the first Class of 2011 employment information publicly provided.

What is the NLJ 250?

The NLJ 250 includes the 250 largest law firms headquartered in the United States. This is measured by the firm-reported annual average number of full-time and full-time equivalent attorneys working at the firm, in any office, in 2011. This does not include temporary or contract attorneys.

Where do the data come from?

First, the NLJ collects survey data from the law firms themselves, not the law schools. A significant percentage of all NLJ 250 firms responded to the survey about first-year hiring. (The NLJ would not comment on the exact percentage.) The NLJ then contacts the law schools to fill in the gaps — but never relies directly on their word. The final figures reached are minimums, representing only the people the NLJ verified to their liking; at no point does the NLJ extrapolate from a smaller number to a larger number.

What do these numbers tell us?

Large firm placement percentage is an important, albeit imperfect, proxy for the number of graduates with access to the most competitive and highest paying jobs. The percentage, accordingly, tell us which schools most successfully place students in these highly sought-after jobs. Successful large firm placement is best analyzed by looking at multiple years worth of data. (View the NLJ 250 from 2010 here.)

What do these numbers not tell us?

First, self-selection controls all post-graduation outcomes. Nobody is coerced into a job they are offered (unless you consider debt pressure or other strong personal influences coercive), so these numbers do not provide more than a proxy for opportunities. Opportunities, after all, are prospective students’ real concern when analyzing employment information, and these rankings do not necessarily reflect a school’s ability to place students into NLJ 250 firms.

Many graduates, particularly at the top schools, choose to clerk after graduation instead of working for these law firms. While not all of these graduates would have secured employment at the NLJ 250 firms, many could have. For this reason, one popular technique used to understand a school’s placement ability is adding the percentage of graduates at NLJ 250 firms to the percentage of graduates clerking for Article III judges. This method is not perfect; read our white paper for a more detailed explanation of the strengths and weaknesses of this technique.

Second, NLJ 250 firm jobs are not the only competitive, high-paying firm jobs. Boutique law firms are also very competitive, with some paying New York City market rates and above. Additionally, the NLJ 250 does not include large, prestigious internationally-based law firms with American offices.

Third, not all NLJ 250 firm jobs are equally competitive. Law firms from different regions and of differing caliber have varying preferences for the students from different law schools, including how far into the class they are willing to reach. That is, two schools that place an equal percentage of graduates in NLJ 250 firms may do so for reasons other than similar preferences among equally competitive NLJ 250 firms.

Fourth, the rankings include data only about the law schools that placed at least 6.49% of its entire class in the NLJ 250 firms. All other American law schools placed a lower, unknown percentage at NLJ 250 firms. The remaining schools range from 0% to 6.49%, and probably do not fall into a normal distribution.

If you have more questions, please feel free to email or reply this post. We will update this as needed.

2011 placement into NLJ 250 firms by law school

Rank	School	NLJ 250 Grads	Total Grads	% of Class
1	University of Pennsylvania Law School	156	274	56.93%
2	Northwestern University School of Law	149	286	52.1%
3	Columbia Law School	235	455	51.65%
4	Harvard Law School	285	583	48.89%
5	Stanford Law School	87	181*	48.07%
6	University of California, Berkeley School of Law (Boalt Hall)	140	305	45.9%
7	University of Chicago Law School	92	203	45.32%
8	Duke Law School	89	219*	40.64%
9	New York University School of Law	187	466	40.13%
10	University of Virginia School of Law	150	377	39.79%
11	Cornell Law School	72	188*	38.3%
12	University of Southern California Gould School of Law	68	207	32.85%
13	University of Michigan Law School	119	378	31.48%
14	Georgetown University Law Center	198	637	31.08%
15	Yale Law School	61	205	29.76%
16	University of California at Los Angeles School of Law	78	344	22.67%
17	Vanderbilt University Law School	43	195	22.05%
18	Boston College Law School	62	285	21.75%
19	University of Texas School of Law	82	382	21.47%
20	Fordham University School of Law	84	429	19.58%
21	Boston University School of Law	48	269*	17.84%
22	George Washington University Law School	92	518	17.76%
23	University of Notre Dame Law School	26	190	13.68%
24	Washington University School of Law (St. Louis)	42	315	13.33%
25	Washington and Lee University School of Law	16	126	12.7%
26	Emory University School of Law	28	225	12.44%
27	Yeshiva University Benjamin N. Cardozo School of Law	45	380	11.84%
28	University of Washington School of Law	21	182	11.54%
29	University of Minnesota Law School	29	261	11.11%
29	University of Illinois College of Law	21	189	11.11%
31	Southern Methodist University Dedman School of Law	28	272	10.29%
32	University of Houston Law Center	27	281	9.61%
33	West Virginia University College of Law	12	126*	9.52%
34	Wake Forest University School of Law	15	158	9.49%
35	University of California, Davis School of Law	17	195	8.72%
36	University of North Carolina School of Law	21	246	8.54%
37	University of California Hastings College of the Law	35	412	8.5%
38	University of Missouri-Columbia School of Law	12	142*	8.45%
39	Seton Hall University School of Law	24	293	8.19%
40	Rutgers School of Law-Newark	19	248	7.66%
41	Howard University School of Law	12	157*	7.64%
42	Villanova University School of Law	19	252	7.54%
43	University of Maryland School of Law	20	281	7.12%
44	University of Wisconsin Law School	18	254	7.09%
45	Samford University Cumberland School of Law	11	157	7.01%
46	Temple University James E. Beasley School of Law	22	319	6.9%
46	University of Alabama School of Law	12	174*	6.9%
48	Brigham Young University J. Reuben Clark Law School	10	148	6.76%
49	Brooklyn Law School	30	455	6.59%
50	University of Miami School of Law	25	385	6.49%

*Graduate class size based on latest data from the ABA/LSAC Official Guide to Law Schools.