Deciphering law schools' post-graduate employment data
The following article was authored by Jason M. Dolin and first appeared in the November/December 2010 issue of Ohio Lawyer, Vol. 24, No. 6. It is being republished here with permission.
With the recession lingering into the new year, law school applicants need to know the facts about post-graduate job prospects. But are universities and NALP telling the whole story?
The National Association of Law Placement (NALP), the nationwide nonprofit organization that collects data from America's law schools on the employment of each graduating law school class, released its analysis of employment data for the law class that graduated in spring 2009.1 At first glance, the employment picture for 2009 graduates appears remarkably robust, but a closer look shows otherwise. For a significant portion of the 2009 graduating class, the legal employment landscape is bleak and is expected to get worse for the next few years, at least through the graduating classes of 2010 and 2011.2
As we will see, law schools know how difficult the employment landscape is but have done little to effectively communicate to their applicants the bleak and uninviting employment future a substantial number of them will face after graduation. Indeed, the opposite appears to be true: Law school websites boast high postgraduation employment rates, leading a rational reader to conclude that you can beat the "Great Recession" by going to law school. Unfortunately, some of the data the law schools present are incomplete and misleading. More unfortunately, law school applicants believe it. What is driving this?
Tuition: the life blood of a law school
Law schools and their deans are under tremendous financial pressure and face myriad economic demands, many of which are not faced by other academic units on the main campus. For example, law schools are frequently called on not only to be financially self-sustaining but also to generate and contribute their profits to support other money-losing academic units. In addition, law schools must support large faculty salaries that far exceed those paid to main campus professors.3
All of this costs money that comes primarily from students paying tuition and related fees, typically $30,000 per year or more.4 Empty seats do not generate tuition, and students might not undertake the enormous personal and financial sacrifices to attend law school if they know the employment prospects at the end of the line are weak.5 Law schools know this too. Telling applicants the truth about their real employment prospects might not be good for business. The law schools' perceived need to "pretty up" their employment data is driven largely by their never-ending need to bring in more and more tuition and, as we will see, to move up the U.S. News rankings ladder.6 There is no better way to do this than by using NALP's "overall employment rate."
The "overall employment rate" mirage
The NALP data shows "an overall employment rate of 88.3 percent of graduates for whom employment status was known" nationally for the class of 2009 nine months after graduation.7 Given the state of the economy, this is considerably better than many of us might have expected. It is also misleading.
NALP's use of the word "overall" in the employment context has a specific meaning, and law schools promote their overall employment rate to prospective students as something that is meaningful. In reality, the overall employment rate is largely meaningless to the concerns of law applicants, but most are not aware of that when they apply.
NALP calculates overall employment by taking the number of graduates employed in any capacity in any kind of employment-legal or otherwise-and dividing that number by the number of graduates whose employment status is known. NALP collects the data by having its law school members distribute an "Employment Report and Salary Survey" form to graduating law students along with instructions on how to complete it.8 Under "Post-Graduation Employment Status," the form lists four job categories with check-off boxes: "bar admission required/anticipated"; "JD preferred"; "professional other"; and "non-professional other."9 The instruction sheet advises that the "professional other" category consists of "jobs which require professional skills or training, but for which a JD is neither preferred nor particularly applicable, such as accountant, teacher, business manager, nurse, etc."
The instruction sheet further advises that a "non-professional other" job "does not require any professional skills or training or is a job taken on a temporary basis and not viewed as part of a career path."
All four categories count toward the overall employment number. U.S. News, whose law school rankings formula includes the rate of post-graduate employment, uses a similar but slightly different formula. What is significant for our purposes, however, is that both NALP and U.S. News count as "employed" those who are employed in any capacity in any kind of job.10 Perhaps the primary and certainly the most interested consumers of this data are law school applicants and law students themselves, and the numbers are targeted squarely at them.11
What kind of jobs do law students want?
There is little doubt that the overwhelming proportion of law students apply to law school with one employment goal in mind: to find full-time, non-temporary, employment in a job for which a JD is required; the kind of job that provides compensation and a lifestyle commensurate with and worthy of the time, money and enormous personal and financial sacrifice invested in a legal education. That is the expectation and hope of most law students when they apply to law school.12 That is the employment standard that has meaning for most law students. Although law schools have or can easily obtain that number, they choose not to report it.
Jeff Sovern, a law professor who teaches consumer law at St. John's Law School in New York City and writes a blog on consumer law for Public Citizen's Consumer Justice Project, writes about how U.S. News rankings for law schools are calculated. "Unless I am mistaken ... jobs at Starbucks count the same as clerkships. But of course, not many people go to law school with the hope of working at Starbuck's."13
Most of us went to law school to become barristers, not baristas. Students do not go to law school to get the same jobs after law school they could have gotten before they enrolled. No doubt, some students do go to law school to get a legal background intending to pursue employment in other fields, but given the heavy debt burden of a legal education coupled with the opportunity cost of three years of foregone employment, it is unlikely that anything other than the smallest fraction of students applies to law school intending to do anything other than practice law on a full-time basis. The exceptions do not make the rule. Students sacrifice mightily to attend law school to prepare for law practice, not for a three-year, six-figure "edutainment" frolic.
Why is NALP collecting data about jobs that have nothing to do with a law degree, jobs for which under NALP's own definitions "a JD is neither preferred nor particularly applicable," or "do not require any professional skills or training"? Better yet, why is NALP including jobs that are unrelated to a legal education in its seemingly meaningful "overall employment rate"? Moreover, why do law schools, which pride themselves on teaching critical thinking skills, present on their websites and in their marketing materials employment rates that contain this irrelevant information?
The numbers behind the "overall" employment figure
There are two important numbers to consider: the overall employment rate and the JD-required employment rate. When we examine the data behind NALP's overall employment number, a significantly less favorable employment picture emerges. NALP reports that the overall employment rate for the Class of 2009 in any kind of job-JD-required, JD-preferred, professional other, non-professional other-was 88.3 percent.14 But NALP's analysis of that number states that when the overall employment rate is "teased apart it begins to reveal some of the fundamental weaknesses in the job market" faced by 2009's graduates.15 In particular, the overall figure included jobs that were temporary, part-time or both.
"Overall" temporary jobs
NALP reports that the 88.3 percent overall employment figure included a high percentage of temporary jobs. According to NALP, "nearly 25 percent of all jobs [in the overall job category] reported are temporary."16 In addition, NALP reported that 42 percent of all law schools created post-graduate "jobs programs" into which they hired their own recently graduated students. These jobs, too, counted in the overall employed category. According to NALP:
Law schools created a variety of employment opportunities for their graduates, and not all of them were on-campus or can be counted in the academic category (though many of the on-campus jobs are both parttime and temporary). Through a variety of bridge programs, fellowships, and grant programs for public interest work, in addition to true on-campus jobs, many schools have "jobs programs" of some sort for new graduates, and many of them predate the recession. For the Class of 2009, it is estimated that these programs provided over 800 jobs, accounting for a full two percentage points in the employment rate. At the high end, these jobs programs can account for up to 50 jobs on a single campus.17
The academic jobs created by law schools accounted for an increase in academic employment from 2.3 percent for the class of 2008 to 3.5 percent for the class of 2009. NALP reported that "An astonishing 69 percent of all the jobs reported in the academic category were reported as being temporary jobs."18 One can reasonably conclude that these were jobs designed by the law schools to support some of their graduates on a short-term basis through the recession-reduced employment market.
"Overall" part-time jobs
In addition to an increase in temporary jobs in the overall category, NALP also found an increase in part-time jobs in the overall category. NALP found that "the rate of part-time employment jumped to more than 10 percent from 6.5 percent in 2008."19 Although there appears to be some overlap between temporary and part-time jobs in the overall category-jobs that were both part-time and temporary-NALP did not specify the percentage of that overlap. Nonetheless, using NALP's overall "any job will fly" employment number, if we assume that law graduates are seeking any kind of fulltime non-temporary employment, then the 88.3 percent overall figure for fulltime non-temporary employment should be reduced by 25 to 35 percentage points (reduced at least 25 percent for temporary jobs and reduced up to an additional 10 percent for part-time jobs).
What about jobs for which a "JD is required"?
There is a second category that is more important to law students: JD-required jobs. The "overall" NALP number counts all jobs of any type. If we assume however that law students apply to law school to obtain work that has three elements: requires a JD but also is full-time and non-temporary, then the numbers look much worse.
When examining jobs for which a JD is required, we start at a lower plane. NALP's figures show that for the class of 2009, 70.8 percent-not the overall 88.3 percent-had JD-required employment nine months after graduation.
That 70.8 percent employment number includes JD-required jobs that are part-time and JD-required jobs that are temporary.20 Thus, that number must be reduced still further to determine the employment percentage for JD-required, full-time employment. Regarding part-time employment, NALP reports that 5.3 percent of all jobs for which a JD is required were parttime.21 Thus, if we assume that in addition to JD-required work, law students seek full-time jobs, the 70.8 percent figure should be reduced to 67 percent.
Temporary JD-required jobs
We are also assuming that law students seek non-temporary (permanent) jobs.22 NALP's data did not provide a specific break out for JD-required work that was temporary. It did, however, provide a break out of temporary jobs in specific job categories. For example, NALP reports that 8.4 percent of all "private practice" jobs were temporary.23 "Private practice" is clearly JD-required work, and at 55.9 percent, constitutes by far the largest portion of employment for all 2009 graduates. In addition, NALP lists that 18.1 percent of all government jobs were temporary.24
NALP did not indicate what percentage of that 18.1 percent were JD-required jobs. It is possible that there is an overlap between JD-required jobs that are part-time and JD-required jobs that are temporary, but based on the NALP data, we just do not know. What we do know is that if you are looking to determine the employment rate for full-time, non-temporary, employment in a job for which a JD is required, then the "real" employment rate-the number that
matters to law students-is less than 67 percent and potentially substantially less even than this.
The deferral rate for JD-required jobs
NALP reports that the 2009 class had 40,833 graduates nationwide whose employment status was known. Of that number, 28,901 found employment for which a JD and bar passage was required. Of that 28,901, NALP reports that "between 3,200 and 3,700 graduates with jobs in law firms had their start dates deferred beyond Dec. 1, 2009, with many deferred well into 2010."25 These were private sector, JD-required jobs. Even the lower number (3,200) is more than 10 percent of all JD-required private sector jobs. NALP counts all of these deferrals as employed (i.e., counts them as part of the 70.8 percent JD-required number) even though it has no way of knowing if these deferred offers ever resulted in actual employment. It is a safe bet that at least some of these deferred offers were ultimately withdrawn. That lowers the "real" employment rate still further.
Thus, on NALP's own numbers-starting with 70.8 percent JD-required jobs and then deducting part-time jobs (3.8 percent), temporary jobs and an unknown percentage of deferred offers, the actual rate for full-time, non-temporary employment in a job for which a JD is required is most likely several points south of the 67 percent full-time JD-required rate. Those numbers are substantially lower, and, it would appear, at least a 25 point drop, from NALP's marquis "overall employment rate" of 88.3 percent.
So what is the "real" (JD-required, fulltime, non-temporary) employment rate for the national law school Class of 2009? We cannot know with certainty, but based on this data it is not a stretch to say it is most likely somewhere in the upper 50 to the lower 60 percent range. That is a far cry from NALP's overall 88.3 percent rate and a further cry from the even higher employment rates commonly claimed on law school websites.
Still looking
NALP also reports that of those who found employment, a large portion appeared dissatisfied with the jobs they had obtained. In his analysis, NALP's executive director remarked:
Another marker of the weakness of the job market is that a much higher percentage of this class reported that even though they were employed, they were still looking for work (22 percent reported that they were still seeking work even though employed, compared with 16 percent for the previous class), suggesting that graduates took jobs they may not have been satisfied with simply to be able to earn some money to offset their living expenses and begin paying their student debt.26
NALP also reported a marked increase in the number of graduates who went into solo practice immediately after graduation. For the class of 2009, solos "represented more than five percent of law firm jobs reported, compared with 3.3 percent for the class of 2008." NALP indicated that the increase in solo practitioners "is consistent with data that was reported during the recession of the early 1990s."27
Those graduating students who enter solo practice right out of law school often do so because they have not found other employment. NALP's executive director concluded his analysis with these words:
We can expect that the overall employment rate for new law school graduates will continue to decline for the Class of 2010, and likely for the Class of 2011 as well, with the curve probably not trending upward before the employment statistics become available for the Class of 2012.28
The recruiting numbers: more bad news
But ugly as these numbers are, it is actually much worse. In May 2010, NALP held its annual Education Conference in San Juan, Puerto Rico, a few weeks before the release of its employment data for the 2009 class. In a session covered by the editor-in-chief of AboveTheLaw.com, NALP Executive Director James Leipold made a presentation, "The State of the Legal Economy and the Legal Employment Market," and discussed some other numbers that do not bode well for the future.29 Leipold stated the entry-level employment offer rate for 2009 summer associates was a historic low rate of 69 percent (it was 90 percent in 2008 and 93 percent in 2007).30 Leipold further reported that the prospects were particularly bleak for those students returning for their third year of law school without an employment offer, with only 3 percent of on-campus recruiters looking to hire 3Ls. That number was 25 percent in 2008 and 42 percent in 2007.
Finally, Leipold reported that the prospects for the graduating class of 2011 looked no better. He told the attendees that 17 percent of the firms that had summer programs in 2009 had canceled those programs (for the recently completed summer of 2010) and that 55 percent of law schools reported a decrease of 30 percent or more in the number of firms doing on-campus interviews. That steep a drop was unprecedented. In compiling its data for the 2009 class, Leipold told the attendees that NALP counts students whose employment start dates have been deferred as fully employed. It does this even though it is aware, or should be, that some deferrals will never result in actual employment.
Hiding the ball
Law schools enjoy the cover of NALP's "overall" employment number, which allows them to claim breathtakingly high-and entirely misleading-employment rates for their graduates. The law schools' misuse of employment and rankings data has not gone unnoticed, even in legal academia. To their credit, a handful of thoughtful and conscientious law professors have been openly critical of the law schools' silence about the use of misleading employment figures. Unfortunately, they are the small minority.
In a recent Web posting entitled "Wake Up, Fellow Law Professors, to the Casualties of Our Enterprise," Brian Tamanaha, a professor at Washington University Law School in St. Louis, wrote:
Law schools advertise deceptively high rates of employment and misleading income figures. Many graduates can't get jobs. Many graduates end up as temp attorneys working for $15 to $20 dollars an hour on two week gigs, with no benefits. The luckier graduates land jobs in government or small firms for maybe $45,000, with limited prospects for improvement. A handful of lottery winners score big firm jobs.31
He writes that while law students "know the score [their true employment prospects] now ... they didn't know it when they first applied to law school. They bought into the numbers provided by law schools." He writes that after they graduate, law students:
Know that law schools pad their employment figures-96 percent employed-by counting as "employed" any job at all, legal or nonlegal, including part time jobs, including unemployed graduates hired by the school as research assistants (or by excluding unemployed graduates "not currently seeking" a job, or by excluding graduates who do not supply employment information). They know that the gaudy salary numbers advertised on the career services page-"average starting salary $125,000 private full time employment"-are actually calculated based upon only about 25 percent of the graduating class (although you can't easily figure this out from the information provided by the schools). They know all this because they know of too many classmates who didn't get jobs or who got low paying jobs-the numbers do not jibe with their first hand knowledge.32
In addition, many law schools are notorious manipulators of the data they submit to U.S. News in an attempt to move up in the rankings.33 To stem the tide of this manipulation, U.S. News has changed the manner in which it values post-graduation employment in its rankings formula.34 In discussing the law school rankings formula used by U.S. News and how law schools sometimes attempt to game that system, Professor William D. Henderson of the University of Indiana Law School, whose scholarship focuses on the empirical analysis of legal labor markets, writes:
Yet far and away the most troubling and problematic input [into the U.S. News rankings formula] is the input about graduates employed nine months after graduation ... a very small change in a school's employed-at-nine-months data can produce a drop of ten or more places in the U.S. News rankings.
Professor Henderson goes on to note that:
The practical effect of this [U.S. News ranking] system is that law schools have a strong incentive to use Enron-like accounting methods to prop up their employment numbers. Yet the unemployment data for the Class of 2009 may be the straw that broke the camel's back. Law schools that train our nation's future leaders cannot afford to squander their reputation capital by misleading entering students.
He concludes that:
... [W]hat law students and prospective students want to know is very reasonable: how will their $100,000+ legal education enhance their overall employment prospects? This is an empirical question worth answering. And in the output-based world we are now entering, it is all that really matters.35
At best NALP's "overall employment" rate-calculated the same way as U.S. News' employment rate-is irrelevant; at worst it is deceptive. In particular, it is misleading for the unwary or the naïve law school applicants who accept the overall employment rate as gospel and don't look beyond that figure.36Though most prospective law students are extremely impressive, they are unsophisticated purchasers of a legal education. The law students I've taught over the last dozen years are by and large young, trusting and relatively unsophisticated in this big-ticket purchase.37 They buy a legal education once. Law schools sell them every day. Advantage law schools.
To the extent that law schools peddle their overall employment rate, they are being less than forthright with their applicants. Law school faculties frequently extol the virtues of transparency in the law and the legal process. It is well past time for that same transparency to infuse their employment data.
The law schools' websites
Do not look to the law schools' websites to help applicants sort this out. In one recent and particularly egregious example, the Southern Methodist University Law School website touted an employment rate of 97 percent for the class of 2006.38 Why did they not post for the 2009 class? Maybe it is the recent article in The New York Times which, in discussing the difficulties of obtaining employment in the legal economy, noted: "Southern Methodist University's Dedman School of Law even recently began paying profit-making law firms to hire its students ... A Dallas law firm will receive $3,500 to test drive [an SMU student] this August."39
In this struggling legal economy the law schools have happily glommed onto NALP's inflated "overall employment" number, seeking its protective cover. If you log onto the websites of too many law schools you will see stratospheric employment numbers-well into the mid- to high-90 percent range-for the recently graduated classes. I guess all of those nervous third-year students I see are misinformed. Based on these numbers they can quit worrying.
The susceptible
Laws schools post their graduates' overall employment rates on their websites, promoting and endorsing these numbers as the truth. They intend and hope that law school applicants reading the employment numbers will believe them. But young law applicants have hopes too. They hope that a legal education will provide them with a secure if not a prosperous financial future. They hope that their more than $100,000 multi-year investment in a legal education is worth it. But their combination of hope and naïveté also makes prospective law students susceptible to the hype and misleading numbers.40 They have no basis for comparison. It is the first and only time they will ever apply to law school.
Law schools hide behind NALP's overall employment number and play loose with their data to create an impression of bountiful employment that in general does not paint a true picture of their employment prospects. This is not something they just started doing during the Great Recession; it has been going on for years. While it is probably too much to say that America's law schools violate their states' consumer protection laws by using the overall number, it is not too much to say that the way the law schools use that number violates the spirit of openness and disclosure that drives the law.41 It certainly raises significant ethics questions about their lack of forthrightness, particularly by state-funded institutions. Parents teach their children by example; law schools teach their students by theirs.42
Law applicants and the U.S. News might feel differently about a law school if it disclosed that 4 out of every 10 of its graduates would not see full-time, permanent, JD-required employment after graduation, or maybe for years. It seems to me like some of these young applicants might be getting an early lesson in caveat emptor.
A request
It is time for law schools to start providing real employment rates to their applicants. The overall number they use is significantly higher than the "real number" that has meaning to most law students. This is not rocket science. We are not trying to cure global warming here. Do the right thing. Post the real number.
So, to the law schools entrusted with the important job of educating the next generation of lawyers, I have a simple request: Publish in a conspicuous, easy-to-find place on your websites the percentage of graduates for each graduating class who found jobs that were JDrequired, full-time and non-temporary. We will be watching your websites for your responses.
