Tuesday, April 17, 2012

The average income of experienced attorneys appears to be collapsing

That stark conclusion leaps out from the data in this survey conducted by the Alabama Bar Association.  What's particularly useful about this survey is that the bar has conducted it three times now in 12-year intervals (1986, 1998, and 2010, measuring the economic condition of active members of the Alabama bar in the previous year in each case).  So the survey provides us with three snapshots of the legal profession in one state over nearly a quarter century.

A crucial caveat about the dollar figures in these reports: they are nominal dollars rather than inflation-adjusted.  Between 1985 and 2009 the CPI doubled, while between 1997 and 2009 it increased by 33.7%.  So, for example, when the survey measures how many Alabama attorneys were making $100,000 or more in 1985, that's equivalent to asking how many Alabama attorneys were making $200,000 or more in 2009, in real dollars.  (The answer, by the way, is that 17% of Alabama attorneys were making $200K+ in 1985 in 2009 dollars, while 8.7% of Alabama attorneys were making $200K+ in 2009.)

More fun facts:

54% of Alabama attorneys were making at least $100,000 per year in 1985 in 2009 dollars, as compared to 28% in 2009.

23% of Alabama attorneys were making less than $25,000 in 2009.

37% were making less than $50,000.  (The median level of years in the profession of respondents was 11 to 20).

In 1997 76% of Alabama attorneys were making at least $67,000 per year in 2009 dollars.  In 2009 approximately 49% were making at least $67,000.

In 1997, 40% of Alabama attorneys were making at least $134,000 per year in 2009 dollars. In 2009 20% of Alabama attorneys were making at least that much.

A particularly telling statistic is that the starting salary for newly hired attorneys in 1998 in Alabama was only $44,100, in 2009 dollars, while the starting salary for newly hired attorneys in 2009 was between $75,000 and $100,000 (only the range is available for the latter year).  What this means, of course, is that the relationship between starting salaries and salaries for experienced attorneys has (at least in Alabama) experienced a radical reversal over the course of the last 12-15 years.  In the late 1990s starting salaries for attorneys in Alabama averaged about half of what all attorneys in the state were making, while today starting salaries are considerably higher than the average income of the state's attorneys as a whole.

The total number of active licensed attorneys in the state doubled between 1986 and 2010, and increased by a third between 1998 and 2010 (the fact that the total number of attorneys has increased at exactly the same rate as the CPI is either a coincidence or rather dark cosmic joke).

Again, what's particularly valuable about this sort of survey is that it gives us an idea of how the legal profession as a whole is changing, as opposed to NALP surveys about employment and salaries nine months after graduation, or worse yet figures about the going rate for BigLaw starting associates (Note that in real dollars the going rate for BigLaw went from $116,000 in 1997 to $160,000 in 2006 -- a fact which obviously has exactly zero relevance to lawyers in Alabama, who over roughly the same time frame were seeing their incomes contract by about a third).

And what do the people running Alabama's law schools have to say about this?

John Carroll, dean of Cumberland School of Law, said the job market was tougher for graduates then, but numbers for 2011 graduates show improvement
"It is something that all law schools are concerned about, and they work hard at placing their graduates," he said. "Hopefully, it bottomed out in 2010 and it will be even better for 2012 graduates."
That statement, besides being false even on its own terms, is also largely irrelevant to the crisis this report illuminates. This blog has focused almost exclusively on the crisis in the American legal profession in regard to its effect on new graduates.  But that is very much the tip of the iceberg. The real problem is much deeper -- much more structural and systematic -- than that new graduates can't get jobs, even though that fact by itself represents a significant crisis in its own right.  The real problem is that, as Hyman Roth once put it in a related context, "this is the business we've chosen" -- and that business is falling apart.

Addendum: Tuition changes at Alabama law schools between 2004-2005 and 2010-2011:

Cumberland:  $23,758 to $32,900. Increase over inflation: 19.96%

Faulkner:  $15,000 (2005) to $31,000. Increase over inflation: 79.03%

University of Alabama:  (Resident)  $8,150 to $15,760. Increase over inflation: 67.93%

Courtesy LSTB.


  1. The legal field is glutted. I have seen experienced attorneys take on entire cases, for $350-$400. How do you spell saturation?

    I have also witnessed defense attorneys, with 10-20 years' experience, JUMP at the chance to be a Public Defender attorney II. Have you also noticed that such attorneys RUN to accept an open judgeship? Apparently, they have seen enough of the trenches. Why put up with meeting a payroll and other overhead, when you can have nice benefits, a pension, secretaries and staff - provided by the state?

    The word is getting out, with regards to this job industry. Before anyone takes offense because I do not refer to the legal job field as a profession, realize that it is a business! You need connections or sales skills to succeed.

  2. http://www.nytimes.com/2012/04/17/nyregion/lawyers-find-obstacles-to-the-disabled-then-find-plaintiffs.html?hp

    Direct result of the law school scam - small businesses are getting sued over ADA violations by ambulance chasers. Disabled people prostitute themselves for a $500 check.

    The middle class is dying in this country. It started with blue collar workers and now white collar work is getting sucked into the globalist abyss. We should really start panicking right now and getting ready for war. Things are going to get ugly...

  3. I have seen experienced lawyers take on entire cases, for $350-$400. How do you spell saturation?

  4. I have been saying this for years. When an attorney gets laid off or fired from their job, even if they have five years of practice under their belt, they go to the back of the line. Lateral hires are rare, unless you went to HYS or another top ten school.

    This fact has a huge impact on income. Now that the market is flooded, attorneys who have five years experience are competing with those who have ten. This profession is fucked.

  5. Entry-level biglaw salaries are up since 1997, but I would be interested in knowing what these kids are actually earning per hour? There was an email out of Quinn the other day where the office manager pitbull was suggesting to the kids that if they weren't billing more 200 hours per month, they might not be working hard enough.

  6. The ABA is terrible. It no longer is about the American Bar. It has become a mouthpiece for biglaw and the law school industrial complex.

    Close the schools. Shut them down. People will bellyache, but in the end its best for everyone -- especially the prospective students. They're just too green to know it.

  7. Interesting data point, but as a general rule, I don't think Alabama is representative of the USA as a whole. So, even if the legal market in Alabama tanked, I would hesitate to conclude that it was tanking in other locations.

    Moreover, one other factor: increasing communication technology and other changes may be creating "regional" or "national" markets in legal services at the expense of more "local" markets. So, businesses that once might have hired overwhelmingly Alabama bar-members in Alabama to do local work may now hire (mostly) lawyers in Atlanta (Georgia bar members working with a local counsel) or even New York.

    Of course, still a potentially bad sign for the profession, and does not bode well for certain types of practitioners in Alabama who are less likely to compete in a regional or national market (e.g., family law, criminal law).

  8. 7:28 This is pretty terrible no matter how you swing it.

    There may be some outsourcing of local corporate work to Atlanta, but it's likely a very small percentage of the overall legal work (albeit high end, high rate work).

    The law market is absolutely saturated. 500,000+ new lawyers have joined the party since 2000. The schools have no shame.

    I'm surprised that law faculty can even gaze at their own navels in the mirror anymore.

  9. The pot is the same. The number of people who have their hands in it has grown.

    But this is a problem nationally and globally. Look at the population indices as compares to twenty or fifty years ago. Too many hands for the pot. And with baby boomers not retiring, those many hands stay in the pot longer.

  10. This point cannot be said enough times.

    Yesterday, I was driving to Court and saw a billboard advertising a bankruptcy attorney's services, starting at $599. To give you some perspective, when I started practicing law in 1986, the typical Chapter 7 fee was $2,000, which in real dollars today is close to $4,000. Essentially, lawyers were making more money 25 years ago than today. I blame the oversaturation of this profession and the proliferation of law schools that are awarding JDs like candy at Rolls Royce prices.

    Lawyers are working longer hours and harder for less pay. Kids are still fooled by the law school's golden bait of the $160K a year jobs. Even the kids that go on to earn that money, are not raking it in if they live in NYC where the cost of living has outpaced these kind of earnings. Add the burdensome student loan debt servicing and you are living an unhealthy live in squalor.

    In spite of all this, kids continue to fall for the hook, line and sinker of a JD being the ticket to the high middle class life. This is an outright lie.


  11. Actually, it's even worse. What's more important than salary is what one's salary can buy. With the CPI under reporting inflation by almost 6% (see shadow government statistics), the standard of living that attorneys in Alabama has declined more than this report lets on. With tuition prices keeping pace with the real rate of inflation, while salaries are falling, with few jobs requiring bar passage, law school keeps becoming a more an more terrible investment.

    Some law schools, and even undergraduate colleges must close, or else all this student debt will begin to effect the overall consumer economy of the United States.

    At some point, a line will be crossed, where to much debt and to many "higher" education degrees will cause a contraction in the broader economy. A lot of colleges and law schools speak of how their graduates will impact the world and change it. I guess an economic collapse is change.

  12. Interestingly, according to the same report, the median billing rate has gone up during the same period. I'm no economist, but don't prices usually go down with demand?

    Also, in Alabama, as nationally, unmet legal needs for poor and near poor (and likely middle class, but no one is counting them) keep climbing, and the number of pro se litigants has exploded.

    Maybe just maybe some attorneys could find a way to make money by charging less than $150-175/hour (Alabama median)?

  13. I suspect this is part of a larger trend: the decline of purchasing power among the 99%-majority (perhaps even more) of Americans. Rising population means more people need legal services, but unless those people are multinational corporations, they cannot afford to pay for the legal services they require.

    That would leave all non-Biglaw lawyers with a choice: slash prices to get some business, or price yourself out of the market entirely. They'll take the option that at least results in some money coming in.

    But if I am right, this is not a problem that can be solved by reducing the number of lawyers. Reducing lawyer supply would make the fewer remaining lawyers more busy and more wealthy at the same price per hour, but you can't increase the price paid for legal work unless the clients either have more income or are spending more of it on lawyers. I think people would be more likely to just do without.

    Anyway, we really need to look at the growth in lawyers vs. the change in population over the areas served by the lawyers to know what the underlying cause of the pricing change is.

    Additionally, looking at three snapshots can hide the details from the overall trend -- it's like looking at three stills from a movie of a spinning wheel. There's a lot of ways to connect three different dots.

    That said obviously this is bad news for anybody thinking of entering the legal profession.

  14. Thank you for this post. It is absolutely on point. There is very little similar data such as this Alabama survey to evidence and demonstrate what many of us know anecdotally to be true...and we absolutely know for a certainty that it is true. Remember also, such surveys as this Alabama survey likely suffer from the same bias as recent law school graduate salary reports. That is, those with higher incomes are more likely to report their incomes, and those completely unemployed or not working in a lawyering capacity are unlikely to respond to the survey at all. Many of us absolutely know that the number of unemployed and highly experienced attorneys is in the hundreds of thousands.

    @7:28, I suspect the legal market has probably tanked LESS in Alabama than in the more urban centers.

    I can speak from first hand experience of California and the District of Columbia. I personally know scores of lawyers, some of them HYS graduates, many or even most of them t14 graduates, some of them former partners in biglaw NLJ250 firms, all of them at least once associates in biglaw NLJ250 firms, who are either i) completely unemployed, or ii) "underemployed" meaning working part time or even if working full time making much less money than they made 10 years ago or a few years ago.

    Who are some of these? HYS grads with several years experience unemployed, former managing partners of branch offices now giving their home address as their own law office, several 2-10 lawyer firms arising with groups of former biglaw lawyers, others who while they may be employed now spent a year or two between jobs, former inhouse lawyers unable to find another corporate job after being laid off, etc.

  15. My observation is somewhat different. There is a big and growing divide in the legal profession between lawyers offering somewhat fungible legal services – i.e., services where a competent lawyer will get you a reasonable result, and the lawyers who offer very sui generis services in situations where relatively large amounts of money are at stake and being good requires a somewhat contradictory set of skills – broad and wide-ranging legal knowledge (e.g., US, European and Asian law) with a very strong understanding of a specific area (like say patent law.) In those very boutique areas lawyers are doing well – but there are a lot of “bullshit artists” who pretend to knowledge and skills they don’t have.

    If what you do is fungible work – in in BigLaw (document review is somewhat, but not truly fungible), then you are in trouble. I would be a little careful about document review because as a junior associate I found things in document review that were worth many millions, but that another lawyer would not have spotted (things like alloy compositions and BCC/FCC temperature transitions, or information relating to techniques for ELISA, etc.) because to understand what you were seeing you had to: (a) know the law (antitrust, commercial, IP); (b) really understand the technology; and (c) be able to formulate a theory based on what you saw. Even as a partner I have had the same experience in document review … so it is not brain dead drudgery.

    The commodity legal work end of the profession, routine property transactions, insurance defense (but not corporate coverage), standard criminal work is increasingly poorly paid. Part of that is that a client can only pay what a project is intrinsically worth – if there are €billions or $tens of millions at stake, the issues are complex and interwoven, then the client will spend a reasonable proportion of what is at stake for legal counsel that can make a difference (and sometimes you win by not screwing up.) But if we are talking about $200,000 for a house with equity of $30,000 a client will not spend $10k on legal advice.

    I read an interesting economic study of real estate agents a few years ago. It explained why real estate agents’ average income does not go up even during a property boom. The reason was that, while property prices went up, more people entered the real estate game and so the commissions were shared further. Moreover, realtors in poorer states like say Tennessee made in terms of the state income the same or more than those in say California because there were less agents and they did more transactions.

    In the same way the high end of the legal profession, the sui generis end seems to attract in members to the profession – but it is an area you cannot get into without the right prerequisites – and even then you will only get into with 10-20 years experience that is hard to get. The result is that we have a growing number of lawyers sharing the fungible work. The high value work that is generated in Alabama is not typically done in Alabama - it goes to lawyers who have the skill sets to do it, and they are mostly found in Washington, New York, London, etc.

  16. These numbers are just reporting the salary results for those that actually got jobs in Alabama as lawyers.

    There were likely twice as many who earned JDs in Alabama and never obtained employment as a lawyer. Add in all of those individuals as a $0.00 and it shows you the real crisis.

  17. 8:19 -- I have a hard time feeling sympathy for all these former biglaw partners and HYS grads you know who apparently cannot find work.

  18. I wonder if B1ly is in that report. :)

  19. @8:19am

    Please don't see my post as contradicting yours. I know of the sort of associates and former partners you are describing. Most have worked in "corporate" BigLaw - securities filings, bod issues, etc. The problem with this work is that is really rather simple - work a "semi-housetrained-monkey" could perform, for which highly qualified people are hired. After 5-10 years doing this stuff, their legal skills, such as they were, have atrophied - meanwhile many are quite arrogant and vain - calling the more specialised lawyers "service partners." One of the top lawyers in her part of the profession - who is much in demand - told me that one such corporate type explained to her that she was "only around to service the corporate clients needs when they wanted someone with international ........ skills." Of course it turns out that the clients came to the office for her skills, not to get "cookie-cutter" corporate work.

    Similarly, I like to tell of interviewing an ex-skadden "Counsel" - 9 years out of Harvard, whose antitrust experience consisted of doing, for 9 years Hart-Scott-Rodino second requests - i.e., putting the package together on a merger filing when the DoJ or FTC declared it a more complicated case. Apart from the fact that this really was a fancy legal clerical task that required little judgment (that was left to much more senior partners), the bigger issue was that in the 90s only Skadden would have had enough second requests to keep this guy busy - and in 9 years he had done no contracts, no depositions, no negotiations, no opinions, just second requests. He was, as the partner I reported to put it, micro-competent in a field we had limited use for, but had less experience than a 2nd year associate in my then firm in areas we could use. (I think I have been involved 3-4 second request situations, more complex case situations, working for 3rd parties opposed to the merger, which required much more though than actually putting the filing package - and once or twice working on getting the deal away.) I felt sorry for him ... he was so screwed ... no one would have been able to use him, let alone pay him what Skadden had.

  20. Mac, that is what I was saying about the pot and hands in it. I actually think there is the same or even more legal work than 10, 20, or 30 years ago being serviced. It's just that there are *so* many more new lawyers that are offering the services. And the high end IP, tech or financial work Mac talks about is being services by long-serving lawyers, barring even the highly qualified young attorneys. These Young ones are then put into the "fungible" pile, adding even more competition to the lower paying end (due to over-saturation) of the profession. It's a pickle.

  21. As part of a 99 cent Nook download (25 great novels compendium), I happen to find myself reading W. Somerset Maugham's "Of Human Bondage" (1915). I stumbled across this passage in chapter XXXIII in which the young protagonist is attempting to find a profession.

    "...and finally it was suggested that he should become articled to a solicitor. They wrote to the family lawyer, Albert Nixon, who was co-executor with the Vicar of Blackstable for the late Henry Carey's estate, and asked him whether he would take Philip. In a day or two the answer came back that he had not a vacancy, and was very much opposed to the whole scheme; the profession was greatly overcrowded, and without capital or connections a man had small chance of becoming more than a managing clerk; he suggested, however, that Philip should become a chartered accountant."

    And so it goes...

  22. One other important piece of information the study omits is that two decades ago, the price of a law degree was far less than it is today, which means that a lawyer back in the latter years of the twentieth century could afford far more with his income because far less of it was simply spent on economically-dead loan repayments. I would suggest that a lawyer graduating today could well have close to $1,000 or more in income (post-tax) sent straight to Sallie Mae, whereas the lawyer who graduated two decades ago never had that problem.

    Love your blog, Campos, but every time I read the thing I regret the past decade of my life...

  23. For comparison purposes, the state bar of Michigan has economic surveys on line (public I believe) for 2000, 2003, 2007 and 2010. They paint I recall a similar picture for the lovely state we call the "Mississippi of the North", no offense meant to Mississippians on the blog.

  24. More depressing nonsense from Campos. If anyone gives him an ounce of credibility, watch A Few Good Men and Erin Brokovich. That's what 99% of lawyers do and 99% is more than 1%.

  25. "Hopefully, it bottomed out in 2010 and it will be even better for 2012 graduates."

    A polite way of saying that students from these years, who struck out at OCI, are screwed.

  26. I can't prove it, but I think there is still enough legal work to go around, even with the tidal wave of new JDs that the law schools inflict on our profession every year.

    Aren't a million or so underwater homeowners in need of counsel? Don't half of all marriages end in divorce, a significant percentage of which are incredibly acrimonous and require the involvement of counsel and courts? Don't non-indigent persons still get arrested and charged with criminal offenses? Don't doctors still screw up? Don't landlords and tenants still fight like cats and dogs? Don't the losers in circuit court litigation look hopefully to the appellate courts for relief?

    The problems are: (1) most recent admittees have approximately zero competence to represent a client in any matter and (2) recent law grads, and downsized big firm and public sector lawyers, are carrying such terrifying debt loads that they can't afford to live on a small law firm salary.

    The whole Langdell model needs to be junked. We should go back to an apprenticeship model, updated and modified for these more complicated times.

    Law school should consist of a bar-review-like crash course at the beginning to teach core doctrine fast. After that, there should be a two year long series of clinics and externships, supervised by adjunct practitioners, not by layabout six-figure-salaried law professors, to train law students to try cases, write appeals, and represent clients in a few practice areas of the student's choice-- maybe not with the expertise that only comes from long experience, but with a basic level of competence and local contacts that can be built upon.


  27. @dybbuk

    If what you are saying is that there is a broad need for legal advice that is not being serviced I would agree with you.

    A few years back we had an issue with a very incompetent and lazy architect who screwed up supervising work on our house (I just wrote a check to replace the skylights 4 years later that she failed to inspect, check, etc.) No question she is an incompetent and we had a claim against her for some $40,000 or more. So why did I not sue (I though about it to cause her insurer to jack her rates - the public needs to be protected.) The reason was that it would have cost $3-40,000 and as the saying goes, there is no justice under $100,000, because you need that big a recovery to justify the cost of most civil cases. Now even for me, the amount was a painful chunk of change, but for many people it would be financially crippling - a loss that would overshadow the financial position for years.

    For most US households even $5-10,000 would be a financially crippling hit, one that would leave them struggling for a few years. However, the cost of providing the legal advice to solve their problems, paying for a lawyer to do the work at say $100 an hour is prohibitive (and the lawyer would be lucky to gross $30-50 per hour.)

    I have a profoundly handicapped younger brother. That means that my parents needed quite careful legal advice under various legal systems when it came to property ownership, etc. and other estate planning. To do a proper job of such an issue is expensive - the lawyer needs special knowledge and needs to ascertain a lot of facts - for instance the situation vis-à-vis my older brother and me, and so on. It got done, but this sort of advice is frequently not obtained because it costs thousands of dollars - even at low legal rates.

    But the problem is that while ordinary clients may have issues which for them are massive in terms of their consequences, they are not fiscally large to allow them to spend what a lawyer would need to make a good income from servicing these problems. Read the numbers on people with mortgage problems and then ask ... what would 20-100 hours of my time to sort this out cost, how does it compare with what is at stake in $/¢ - but then realise that this is a family losing their home!

  28. Just to follow up on MacK's point, average American household income was just under $50,000 last year before taxes. After taxes it was about $37,500 (people who make $50K a year pay a larger percentage of their income in taxes than people who make $10,000,000).

    So the average household has about $3K a month to pay for all of its expenses. There's no money in there to pay for a lawyer for anything beyond a DUI charge, if that. For example 85% of divorces feature no legal representation for either party. Etc. etc.

  29. And, of course, saving someone's home doesn't actually produce cash for them. And if they had excess cash to pay a lawyer, they probably wouldn't be in trouble with their home.

    It's a tough situation: even an efficient litigator can't do a full on lawsuit (e.g., discovery and motions up to the professional standard, short trial) for less than what for an ordinary person is a year's pay.

    A guy came to me (a solo) last month, having (he explained) been cheated out of $11,000. Real money to him. Also needed a preliminary injunction to prevent more serious harm. Couldn't get anyone to take his case -- even if one could imagine a possibility of making a claim under a fee shifting statute -- because of the economics of it.

    So yes, vast unmet needs, huge oversupply of lawyers, disaster all around. There's no obvious solution for those of us already in the system.

    Montana has a survey out, from last year: http://www.montanabar.org/associations/7121/files/2011%20Bar%20Member%20Survey%20results.pdf

    78% of lawyers are in firms of 10 or fewer. 46% are age 50 or older, so maybe attrition will help solve the problem. If only we oldsters could afford to retire.


  30. (Our bar has just approved limited scope representation, as one way to get around this. If all I have to do is ghostwrite a complaint and a motion for summary judgment, then I'm not on the hook for the depositions I didn't take, and documents I didn't review. Problem, of course, is that this allows me to lose the client's case at a reduced cost, and not necessarily to win at a reduced cost. A lot of that stuff we do, and charge for, is actually important.)


  31. @CC

    I'll tell you a little story I have heard from UK and Irish solicitors. As you know in both places there is a fee-shifting rule - the loser pays. The mechanics is that at the end of the case the winning lawyer submits a claim for costs to the "taxing master" and the bill gets signed off on by the taxing master and the judge.

    A lot of bus companies "self insure" or have multi-million deductibles. Now bus companies have quite a lot of claims - collisions with other vehicles - cars, taxis etc. Fender benders, but maybe medium claims £25,000-40,000/€30-50,000 - no one seriously injured but car totalled or a big bill for repairs and maybe a few days-week off work.

    So what do the bus companies do - they run up costs by delays, motions, examinations, etc. etc. Eventually the solicitor might win the case - say £€40,000 - but the bill that has to be submitted to the taxing master is £€80,000 or £€100,000 - we are talking 2 years work. And the taxing master/judge gets a bill for twice the recovery and announces - "that's outrageous" and cuts it to say £€20,000, less than the cost to the lawyer of running the case.

    Slowly solicitors and insurers have learned that this is what happens, and now, even when someone with a really legit claim comes in - a taxi driver whose cab as totalled while parked was one example I know of, the solicitors increasingly turn down the case. The bus companies have cut their costs by making it uneconomic for anyone to recover.

  32. The solution to meeting the legal needs of average people who can't afford a lawyer? Have the ABA approve the use of certified paralegals to do basic stuff like immigration, residential real estate, minor traffic and criminal work etc. This is the equivalent of a registered nurse treating a sick person at a clinic. Then leave the lawyers to work on the more important stuff.

    This will never happen though. Why? Because practicing law is never about the justice, and always about the money, and the ABA will never let this happen.

    The trouble is, paralegals aren't taking work away from lawyers. They are doing work that no lawyers want to touch.

  33. CC -
    What's your best estimate of how much time it would have taken you to pursue that $11,000 lawsuit, in a manner that would have been likely to get the client, let's say, at least a 50% recovery/settlement?

    I'm just curious about the huge gap between charging nothing (or being unemployed) and charging $150-200/hour. Is there no way to make, say, $75-100/hour work?

    Really, this question is for all the experienced lawyers on here.

  34. I appreciate MacK's point, but would note: a small firm lawyer not carrying a massive interest-accruing educational debt load, or needing a few years of post-law school experience to achieve competence, would have far more ability to offer long-term payment plans to a client.


  35. We must stop lending to law students. Period. It's not good risk and the market is too saturated.

  36. @dybbuk

    Long term payment plans means in effect offering credit. How much a month are you talking about - $100 is a lot for the average household. What do you do if they don't pay? Have you considered the collections cost and effort of say getting that $100 off 20-30-50 household every month?

    Almost every lawyer I know has told me that deferred payment plans go sour - the client will always have other more pressing priorities - and will come to resent paying a month after the legal problem is solved. Meanwhile the lawyer needs to pay his/her staff, his/her rent, his/her bar dues, his/her malpractice, etc. before that lawyer pays himself/herself.

  37. Well, gosh, I sure am glad my law school is reporting 100% employment for the May 2011 graduating class.

    And, I am certain that figure is accurate. /snark.

  38. @MacK - The problem with the case you describe is that the amounts claimed are above the maximum that can be persued using the fast or small claims tracks in the English courts (£25k) and fall into the less-regulated multi-track class. The new (1999)Civil Procedure Rules in England & Wales have cut off the majority of avenues for the kind of shenanigans you describe in fast/small claims track cases.

  39. @FOARP

    Small claims county court has a £5,000 cutoff - and only a company gets to use a solicitor/barrister - and there is no costs award.

    CPR Part 28 (which is England not Ireland) has helped but it is not perfect and once you are over £25k (not a lot) or if the defendant manages to persuade the court the case is "complex" you are back on multi-track

    It is still a tactic used by companies with serial and regular defense cases - create an irrecoverable level of costs for the plaintiff - give the impression the costs they seek to tax is unreasonable - and rely on the court agreeing. I have heard this anecdotally and the situation may be improving as the courts force more cases to the fast-track.

  40. @MacK - Yup. Patent cases (which are all 'complex') especially - one of the reasons why German law is favoured over UK law for the EU Patent Court.

  41. The problem with having paralegals stuff is the same as the problem with having nurses do stuff: it works out fine unless it doesn't.

    Lawyers I know aren't really acting like a cartel: there are real concerns about a paralegal not knowing to ask questions that do not directly address an entry on the form, and the paralegal is going to have to carry insurance, too. And have a standard of care. And pretty soon you're in the same soup.

    I know it's popular to think that the vast majority of small matters are so simple anyone can do them. And it might even be true. But it's not as big a majority as anyone thinks: people screw up the simplest stuff for themselves all the time. (Talk to a family lawyer about the messes pro se parties can create.)

    What would it have taken to prevail in the $11k case? It depends, of course, on what the other side did. It costs about at least 1k per depo, and you could well have 2 or 3 of them. And the case had an issue that a person could have expert testimony on. Draft discovery is quick -- maybe $200 to write yours and read theirs -- and another $500 to read what they sent, and what you have to send out. And another $200 to draft your answers. No one has filed any motions (that is, the opponent has complied adequately with his obligations) and you've already spent 4k, and there hasn't been a summary judgment round, or, if you're going to trial, jury instructions, objections to the other guy's exhibits, witness prep, writing cross examination. That is, even at $75, I don't think you could have confidence you'd bring this in under 8k. 100 hours is only 12 days or so, after all. Spread out over an 18 month period, say. During which time you'd have several more of these, hopefully. That, by the way, is 8k the guy couldn't spare.

    There are plenty of lawyers (just like contractors) willing to quote low and then make their profit with 'change orders.' Which works out, I guess, so long as the client can afford to pay.


  42. @Foarp

    The main reason patent holders like the German system is the split between validity and infringement - and the ability to advance different claim constructions in the Landgericht to the Bundespatentsgericht - plus until recently the UK courts did not see a patent it did not invalidate - remember the Screwpull golden bonus not to mention the ever charming Robin Jacob

  43. Great work.

    Looks like the salaries are pretty similar to a distribution of college graduate earnings over time - meaning that the law degree seems to be showing little earning power over a career.

  44. CC - not to mention if you billed at $75 per hour you would be lucky to clear $25 per hour. Do the math 40 billed hours equals $3,000. Allow for a high 85% collection rate and you are looking at $2450. Subtract office plus a secretary/receptionist/assistant at say $20,000 pa (low) and that persons SSI and that takes out about $450 a week - which gets you to $2,000 - now take out insurance, rent, office equipment, dues, self employment taxes and you are lucky to have $25 per hour left. That is $52k a year. All of that assumes you find clients that can pay $75 per hour.

  45. I've been told that one of our largest retail companies never settles small damage claims etc. That way one can not get the quick $5,000 to $10,000 settlement from them and the plaintiff lawyers know that it will take a large amount of time and money to see the case through.

    I think that most people think that the attorney "pockets" essentially all of his or her fees. I'm guessing that 80% of the fees go to other expenses.

    My understanding is that attorneys have a significant problem getting paid on time or even paid at all.

  46. @4:10pm

    Most companies settle the small claims - i.e., under $5k or $3k or £5k - depends on the jurisdictional level because defending will typically cost $1-2k (same in pounds), the plaintiff will not have counsel and the court is solicitous of small claims plaintiffs. Head into the middle ground of 5k up to 100k and the tactic you are describing is not uncommon.

  47. "Aren't a million or so underwater homeowners in need of counsel?"

    Why would anyone in their right mind try to save an undewater house?

    "Don't half of all marriages end in divorce,"

    People get do-it-yourself forms at the courthouse

    It really takes me an average of 13 hours to do an uncontested divorce -- and that's by keeping phone calls and the like at a minimum. Most people don't want to pay for an attorney in an uncontested case.

    "a significant percentage of which are incredibly acrimonous and require the involvement of counsel and courts?"

    Most of the people who want to engage in these battles cannot afford the attorneys fees needed to fight them.

    Some attorneys make it a practice to take a $1000 retainer, and withdraw from the case once it is spent. It is spent very quickly, by the way.

    "Don't non-indigent persons still get arrested and charged with criminal offenses?"

    These are few and far between. They mostly are drunk driving cases. People will not spend a lot of money on a DUI -- usually a couple thousand dollars max.

    Attorneys try to plea bargain these cases. But if your client wants a trial, the judge will not let you withdraw if you client doesn't pay you. This is universal fact of life in criminal practice.

    "Don't doctors still screw up?"

    Can you front $75,000 for expert witness fees?

    These cases are hard to win, and doctors will fight them tooth and nail.

    "Don't landlords and tenants still fight like cats and dogs?"

    The question judges ask is "Have you paid the rent?" If the answer is "no," the tennant is out.

    Besides, if someone has not paid the rent for several months, why do you believe they could afford to pay you?

    "Don't the losers in circuit court litigation look hopefully to the appellate courts for relief?"

    Does any sane lawyer really want to take on an appeal that someone else screwed up at the trial court level?


    Once you get out into the real world, you discover most people cannot come up with the money to pay a lawyer. In fact, most families could not come up with $2000 in a month.

    Lawyers discover the only money they get paid is what is paid up front.

    You also discover that any effort to collect fees will result in a malpractice suit being filed against you.

  48. Beyond competence, which someone has already raised regarding using non-lawyers, the other issue is fraud and malpractice.

    Right now, I am knee deep in a situation in which the work of the prior counsel was shoddy. I don't think clients are suddenly going to have even more money to recover from the cost of shoddy legal work (either due to incompetence, fraud, or malpractice (which can include more than incompetence).

    The people I work with can afford me as far as risk assessment and figuring out the wasted dollar. Most Americans can not afford that kind of luxury of a second lawyer, especially if they can barely afford the first.

    The problem is systemic. Meaning, there is no cure that's going to be any thing less than system. My systemic- I mean the entire American economy.

    Bruh Rabbit

  49. By the way, it took a while, but people are finally starting to cite relevant data.

    For example, if the average American consumer's budget is so tight, is it any surprise they are desperate enough to go to law school to win the lottery of not being on the edge of economic ruin just 2 pay checks away?

    During the Public Option debate, there was this great chart at a Liberal site demonstrating how the average budget breaks down. I mention this because the spending power of Americans is due to decrease even further. The fact is issues like private health care insurance, the speculation happening in the food markets, etc will continue to rise.

    Bruh Rabbit

  50. To give a practical example, the cost of private health insurance, even under the much complained about Obamacare, will go up by about double. In fact, we can be certain of this if we look at Romneycare, on which Obamacare is modeled.


    In short, again, all those things that makes it hard for people to pay for lawyers now will only become worse in the future.

    Bruh Rabbit

  51. @ High Plains Lawyer (April 17, 2012 4:58 PM)

    The TD,DR version of what you said is simply this:

    While there may potentially "still be lot of legal work to go around", it doesn't count if ON AVERAGE, it doesn't pay to do said work. All examples of potential legal "work" consists of work which won't pay off for an attorney to take on.

  52. Gloom & Doom...!

    In spite of this economy & a few attorneys not getting offers, there are quite a few young Attorneys doing very well..

    We will call this person Anne... Anne is 28 years old. She attended a top10 University Law School...

    Anne graduated from LS December 2008...Her Law school has an early graduation in December & the regular one in the Spring...

    During the Summers of 2007 & 2008 Anna worked for Big Law... The Firm she worked for from the first week in May to the last week in August 2008, paid her $3,700.33..A WEEK.AFTER TAXEs (I remember the 33 cents, because Anna is the only person who knows how much she is paid down to the penny)...

    Anna sat & passed the Bar in 2009 but helped her sister who had a baby & worked for her father writing reports... Her firm gave them handsome pocket change to sit tight until they were called...
    Anna was called in February 2010.

    But hear this .. I called her today to verify this... Anna HAD 120k in student loans..

    Anna paid 2k for 2 months in 2009 and 2k each month in 2010 & 2011..

    Anna has made 30.. 2k payments between 2009 and April 2012 .

    Anna made her last car payment last month and she is not in a hurry to buy another..

    Anna also paid $1,500.00 a month on her condo but she is going to move in with her 35 year old fiance who has also paid off his student loans.. He worked right through LS and graduated with honors...

    Know what..They are not the only ones who are doing this...

    Hats off to them...

    Those who are still unemployed.. Please do not lose courage because YOU WILL find good jobs and you WILL be able to pay back your loans.

    The mountain at this time may seem far away & too high to climb but, you will conquer it... I promise.

  53. That's great for Annie. That's called an anecdote. Now say something about the overall data. We already know someone will get ahead. That's like saying someone will win the game in a game of Omaha. The question is whether that's a system we want to promote for the general economy.

  54. 7:37,

    So how much do you get paid for your speeches?

  55. 7:37, Where can I sign up?

  56. 7:37, don't you know that the folks here don't want to hear that anyone can succeed after law school by using their JD?

    All statistics are are a compilation of anecdotes...and the greasy wheels are the ones more likely to complain, so it's skewed anyway.

  57. So the story is that a T10 grad repaid their loans and is now living with the person they intend to marry? What does that mean?

  58. I guess I should have said T14 - but I was trying to understand what the Annie person was saying. Obviously the poster is Annie's grandmother or something.

  59. FWIW: you can get certified to practice in immigration court without a law degree. One of the best known people in asylum cases in NY is a Catholic priest who has worked in this field for decades.

  60. Here is another example: my ex-husband owed me around $15,000 of money for child support and other amounts under our divorce agreement. But any competant attorney had an upfront retainer of $5,000. That was great for them, but it made it difficult for me to hire anyone. I eventually did this myself and I know I didn't get nearly as much done as I would have if i had been able to hire a lawyer. It just isn't worth their time to do cases like mine for less.

  61. The point is that unserved legal needs aren't being met because good legal work takes time.

  62. @11:39

    You must be joking if you think that immigration matters aren't serious. A mistake in an immigration filing can have irreversible consequences. Immigration is like criminal law, would you want paralegals in court defending a life or death charge?

  63. @7:37

    Why did Anne change her name to Anna after sitting the bar but before starting at the firm? Did she initially fail the character and fitness review by the Bar and decide to try again with a new, untainted identity?

  64. I dunno this $3,700.33 a week after taxes in 2008 sounds like a made up figure. This is the weekly amount on a $160,000 salary in NYC. Even before withholding it is $700 less a week than she claims for after taxes.

    Here is paycheck calculator for NYC at $160,000 a year based on current amounts. Take home is $1975 a week. And that is before other deductions for insurance and other stuff.

    Weekly Gross Pay $3,076.92
    Federal Withholding $724.20
    Social Security $129.23
    Medicare $44.62
    New York $202.54
    SDI $0.60

    Net Pay
    Net Pay $1,975.73

  65. "That would leave all non-Biglaw lawyers with a choice: slash prices to get some business, or price yourself out of the market entirely."

    False. I am not a Biglaw lawyer, and I haven't had to slash prices. In fact, I've raised my rates, and I am busier now than I have been in my 24 year career. Most of the lawyers I work with say they are busy too.

    Anecdotes do not equal data; I get that. Likewise, be careful to think that because you look out your window and its raining, that means it is raining everywhere.

    As far as the small cases, I agree with CC to a point. There are many ways to approach a small case, though, besides simply litigating it to trial. In many small cases, merely using one's letterhead can get things moving. Sometimes you can find insurance, or a duty to defend. Sometimes you can find an executive branch agency to help. And, yes, sometimes the client is out of luck.

    I practice in a smallish town in the sparsely populated state of Montana. There is work in our state for lawyers...UNLESS...unless those lawyers have $200,000.00 in non-dischargeable debt. In that case, they can't afford to work here.

    The cost of law school forces students to shoot for Biglaw because what is commonly known as "Shitlaw" (I call it helping others), will never pay the rent.

    I've done a little of everything over my years, and now I do mostly small business work and personal injury litigation (ID with some plaintiff's work). Am I a jetsetter like MacK? No, but I'm comfortable, I like my job, I have a life, a family, and will retire in my 60's (and wouldn't want to retire any sooner!).

  66. To carry on with the above:
    3700.33 after taxes would be 192,417.16 annual after tax income.

    No one was paying that in 2008. And no one is paying that now. No one is paying that even in gross income now.

  67. I still don't get why a biglaw lawyer paying their loans is news.

  68. @Gregg Smith

    I should not that I jet between two small firms on different contents and represent a lot of small businesses, albeit ones with exotic legal needs. I could be a member of another firm set up by my grandfather years ago in a medium sized city. Moreover, my practice comes with some jaw-dropping expenses - a home in one expensive city and an apartment in another (the latter is only just less than a hotel at this point.) In Washington DC even $1 million will buy what say $150,000 would in Montana - and London and Tokyo, eeek!

    That said, what your posting does not address is how long you have been in practice and how much of an opportunity you had to get established and to gain experience. Given a relatively low living cost it would be much easier for you to represent people in the sort of practice that you describe (which incidentally I have never called "shitlaw.") Moreover, in many respects your practice is probably as specialised for smaller town Montana as mine is for international high tech and your skills are therefore sui generis.

    What I would say is that even in what you deride as my "jetsetter" practice a debt level of $200,000 for a new lawyer is unsupportable. To get to where I am took a couple of decades of hard graft, the early years of which did not pay that well - I could not have done it with the interest on $200k hanging around my neck, or perhaps even $100k


    Are you some Polyanna law professor? If so - well, hmm $3700.33 a week after taxes means that the annualised salary is $192,417 and 16¢ (remember the cents.) Since every summer program I have ever heard of will only pay - at most - the weekly equivalent of a first year pay check I am somewhat puzzled as to what firm Anna the paragon was working for - it could not be Cravath, Simpson-Thatcher, Skadden - who is this firm that pays first year associates $192k. And of course since you said this was "after tax" that would in fact mean that the firm was paying first year associates a number that grosses up to around $292k What firm? Inquiring minds want to know?

    Of course it could be that you are a trolling law professor - to whom I have a suggestion - if you cannot come up with a fib that complies with basic math, and you don't bother to actually look at what even BigLaw pays, well perhaps you should not be teaching law.


  69. MacK, my apologies. I didn't intend any derision. I was merely making the point that a guy can make a decent living even in a less 'sexy' practice...if there is no student loan millstone around the neck.

  70. @Gregg Smith

    The problem is even in a "sexy practice" the millstone would likely drown a guy.



  71. 5:12 AM Cute...Anne/Anna is not her real name ... The names have been changed to protect the innocent...and me, the guilty....

  72. 5:33 AM Yes that firm pays ..Starting Salary $160K... But the firm chose 4 people from the group of summers and paid them I believe $178K... These 4 were asked to work 3 weeks longer ..right to the end of August of that year after the other Summers returned to their homes in early August waiting to see if they had received offers..
    The chosen 4 knew that they had offers when they were asked to stay on...

    Anne was given lots of praise and was told that she was on the right track for making Partner in a few years...

    Since 2010 Anne has been given 2 raises & 2 bonus'

    I am not going to name the State or her Firm for obvious reasons...

    Somebody had to win the Big Firm Lottery...

    P.S. The 3 other people chosen with Anne were all men and Anne believes that they are all doing MUCH better than she is....

  73. There is no big firm paying a grossed up $290,000 to a fist year which is what it would have to be to match your after tax amount

    Not believable


  74. 6:01 Am Mac K... No they did not get that salary as a Summers, and you are right their salary as a Summer was based on their first year as an employed employee.

    When the 4 were asked to stay on for 3 additional weeks, they received their offers and an instant pay raise for when they started to work...The 4 were told NOT to discuss their offer with anyone at the Firm...

    Even among the 4 they have no idea what each was given.. but they understood that they were given more that the other Summers who received offers...

    They are working for the Firm for 2 years now and the Firm has been very generous

    I guess it's games people play.

  75. I certainly agree with my colleague from across the divide that one may well get a small case resolved short of litigation. This is always the goal, if possible. And once litigation has started, the goal is to end it as soon as possible under terms acceptable to the client. That said, when you take on a plaintiff for anything beyond writing a demand letter, you're in for the whole ride, and if damages are modest -- in terms of potential fee from recovery, not the value of the sum to the potential client -- there are plenty of times where plenty of lawyers just have to say no.

    I'm newer in the community (having left biglaw a few years back) and so tend to get people who've been told no, some several times, and some from Gregg's town (although this is not particularly convenient). Part of that may be a function of how well things are going over there (and I'm happy they are, as a few law students I know are taking jobs there) but there are also economic issues the present real barriers.


  76. WRT Annie's story, even accepting the fishy sounding details, the story isn't exactly relevant. No one is saying that no law student is going to make it. But to take a fringe story like this and say -- Those who are still unemployed.. Please do not lose courage because YOU WILL find good jobs and you WILL be able to pay back your loans. The mountain at this time may seem far away & too high to climb but, you will conquer it... I promise. -- seems positively deluded.


  77. This comment has been removed by the author.

  78. I am sorry, but the more you post the more false your story sounds:

    You say: "The Firm she worked for from the first week in May to the last week in August 2008, paid her $3,700.33..A WEEK.AFTER TAXEs" and "you are right their salary as a Summer was based on their first year as an employed employee."

    So let's do the math. First $3,700.33 a week would equate to $192,417.16 a year "AFTER TAXEs"

    But to really see what she earned we need to gross up her pay for 19 weeks (first week of may to last week of August)

    19 x $3,700.33 = $70,306.27

    Now we need to assume that this young lady is in New York (but it could be another high tax city like DC or San Francisco.) Let's also assume that she had no other income outside the 19 weeks (and if she did your nose would be longer.)

    So grossing up in New York we find she needed to make $92,000 for those 19 weeks of work. That puts here on the remarkably high first year associate salary of $251,789 and 47¢ (count the cents)


  79. Peyton Manning just signed a 5 year, $90 million deal.

    Should we tell all of the starting quarterbacks at each of the NCAA schools not to lose hope, that they'll climb the mountain....that just around the corner there is a pot of gold for them as well?

  80. 2:16 PM... Mack...I never said that as a Summer she got $3,700.33...

    As a Summer if you go back and read..She received the pay of a "First Year Employee" which was $160K....

    In the beginning of August when all the other Summers were packing up to leave, Anne, together with 3 guys, were asked to stay on for 3 more weeks..
    That is when she learnt that she was given an offer..That offer was for more than $160K ..The Firm told her not to discuss the offer with anyone at the "Firm"....The Firm usually calls the Summers to tell them if they got an offer or not but these 4 were called into an office and given the NEWS there..

    She does not boast about her accomplishment that she should be very proud of, but she grew up in a family where they were told not to keep credit card balances and she should pay everything cash when she can..

    The student loan balance was actually making her ill she said.. and someone who helped her with a budget told her that she could afford to pay it back at $2k a month and still live reasonably comfortably.

  81. MacK... This is just for you...I believe some bad news would make your day and help you sleep well tonight...

    We just hear that one of the star pupils is no longer working at O'Melveny & Myers LLP... That is so sad and also nerve racking...

    AND NO! Anne does not work for O'Melveny. She never interviewed with them.

  82. @7:52 and 8:01pm

    My star pupils - I have one? O'Melveny & Myers?? never have anything to do with them.

    As for "2:16 PM... Mack...I never said that as a Summer she got $3,700.33."

    Yes you did - here:

    "During the Summers of 2007 & 2008 Anna worked for Big Law... The Firm she worked for from the first week in May to the last week in August 2008, paid her $3,700.33..A WEEK.AFTER TAXEs (I remember the 33 cents, because Anna is the only person who knows how much she is paid down to the penny)... "

    That is you - isn't it? The same preachy tone ... the same everyone else is wrong.

    I mean when you tell a lie on a page where the lie is present and available for anyone to scroll up to ... you really cannot expect to be believed or though of as anything other than a fantasist.

    I sleep very well, except for the odd bout of jet-lag.

  83. Oh incidentally, if you are saying she was being paid as a first year associate $3,700.33 a week after taxes that means that backing in the taxes put her on a salary of around $300,000 - wow! Who pays that to a first year?

  84. MacK...I believe what Anne told me..I know she said $3K something & 33 cents a week...I remember the $3K because it is much more than I make and I remember the 33 cents..Because I round out figures & never count the cents...

    I spoke with her last night & did not have the gall to ask her how much her salary is at this time.
    but I did bring up salaries and she mentioned that some Firms have enormous starting salaries for employees that are sent overseas. China, Japan, Dubai, etc... You should know you "Jet" around.. By the way so does she...

    Me, I am in the line with my shoes in my hand..

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