The Most Important Chart In The Legal Industry, And It Has Nothing To Do With The Law

You're probably not going to be making $190K when you graduate.

Before Wednesday’s historic news that Justice Anthony Kennedy is retiring from the Supreme Court, a seismic shift in American jurisprudence that will likely filter down to all aspects of everyday life in ways that are both completely foreseeable and likely impossible to fully fathom unless you have read every Federalist Society white paper for the last several decades, the biggest news in the legal world (or at least among Above the Law readers) was the ongoing race to raise wages in Biglaw, highlighted by the jump to $190,000 for first-year associates.  And while most law students with Biglaw aspirations are focusing on how they will spend that extra $10,000 — to say nothing of what sort of Thomas Piketty nightmare fuel eighth-year associates will be able to generate with $340,000 — there have been some speed bumps along the gold paved parade route.

Not only are some firms failing to raise salaries despite rather large bottom lines, but as Staci Zaretsky pointed out in these pages, the number of law students who will actually make top Biglaw dollar is a relatively small percentage of the overall law student population.  Staci illustrated her point by using the bimodal starting salary distribution slide put together yearly by the National Association for Law Placement.

While I am inherently loathe to praise anything PowerPoint related, the bimodal distribution curve is the single most important graph when discussing legal employment for multiple reasons.  First and foremost, it illustrates the unique economics of the legal industry.  As I have heard NALP’s Executive Director Jim Leipold say before, if you showed any economist the bimodal distribution curve, they would quickly conclude that the legal industry makes no real economic sense.  In an economically rational system, salary distributions fall along a standard bell curve.  Why pay a sizeable number of attorneys such a massive amount of money (i.e., $190,000) when the median salary is roughly half that amount and a plurality of recent graduates make a quarter of that amount?

Secondarily, as Staci notes in her article, the bimodal distribution curve shows that the top end Biglaw salaries that garner all of the Above the Law headlines were only earned by 16 percent of the Class of 2016.  However, as I recently mentioned to a 0L trying to choose which law school to attend — yes, I bring this graph up as much as I can with students to the point that if it did not change each year, I would probably get a framed version for my office that I could just point to when the conversation dictated — that 16 percent is a bit misleading as one’s chances of obtaining a $190,000 starting paycheck is going to greatly vary depending on which law school you attend.

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I have previously mentioned in this space, there is a wide range of data available to prospective law students trying to make an educated choice about which school to attend, particularly the American Bar Association Employment Outcomes.  They are uniquely valuable when trying to calculate your odds of earning top dollar upon graduation as these reports not only tell you the type of positions students obtained for after graduation but for those students who are working in private practice, the size of the firm.  While not a perfect correlation, the firms which have at least 501 attorneys firm-wide are the most likely to be paying first year associates $190,000 (or at least $180,000).  There is a reason it is called “Biglaw.”  With that intuitive bit of information in mind, you can see that the 16 percent figure is routinely surpassed as you go up the law school rankings.  When you look at the all-school data, you see that the percentage of students who work at a 501+ firm after graduation ranges from 0 percent — more than 40 schools failed to send a single person into the largest firms upon graduation — to 67 percent.  As the one, and only, Meat Loaf taught us all:

Additionally, this ABA data tracks the first job a graduating law school has, but there is more than one avenue to make it to the $190,000 promise land.  The value of clerkships is something that I have spoken about before in this space and, especially at the federal level, often serve as a precursor to Biglaw.  The employment reports also provide the number of graduating students going off to clerk, so those numbers can be added into the analysis.  The all-school data shows that the percentage of federal clerks in a graduating class ranges from 0 percent to a rather remarkable 29.5 percent, or nearly one chance in three of clerking for a federal judge right after graduation.

Of course, when trying to best maximize your legal salary, the total amount is but part of the equation as cost of living must similarly be considered.  $190,000 is New York City is great if you are looking to buy a home in certain portions of Queens or Long Island, whereas any devotees of HGTV’s Fixer Upper knows that $180,000 in Texas can buy large swaths in Waco.

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If you enter law school only to grow “rich beyond the dreams of avarice,” then you may well end up disappointed, for as the bimodal distribution shows, such levels of wealth are not the norm for graduates.  But reaching the top of legal salary heap, in this case the second peak in the bimodal distribution, is possible, especially if you use the tools available to be judicious in your law school selection.


Nicholas Alexiou is the Director of LL.M. and Alumni Advising as well as the Associate Director of Career Services at Vanderbilt University Law School. He will, hopefully, respond to your emails at abovethelawcso@gmail.com.