Is “Steve Diamond” a mole for the law school reform movement?

This hypothesis would explain why he keeps putting forth defenses of the legal academic status quo that are so laughably wrongheaded that they can only serve to nudge fence-sitters toward the shining path.

The alternative explanation is that he’s both delusional and none too bright.

In his latest missive, Diamond claims that lawyers and law students are doing great, in fact better than ever:

BLS data show that legal employment and incomes have comfortably recovered from the decline that set in after the crisis. In fact, nationally incomes and jobs for lawyers have increased steadily for at least two decades.

[L]aw students today are better off than those of a generation ago.

Let’s go to the numbers. Diamond cites Bureau of Labor Statistics occupational employment stats for his claim that incomes for lawyers “have increased steadily for at least two decades.” That’s a very misleading statement, for two reasons, one relatively minor, and the other not minor at all. The relatively minor reason is that, adjusted for inflation, median salaries (a crucial term, as we’ll see shortly) for lawyers have been essentially flat since the mid-1990s, which is as far back as the BLS stats go: adjusted for inflation, the median salary for lawyers has increased by less than 5%, from $110,000 to $115,00. That’s approximately half the wage growth experienced by the average American worker over the past two decades — which, needless to say, have hardly compromised a banner era for American workers in general.

But, misleading as that part of Diamond’s statement is in context, that’s a minor point in comparison to another one, which is that the BLS wage statistics Diamond cites don’t include self-employed workers. How important is this omission when calculating the actual compensation of lawyers? (Let alone law school graduates, which is a very different category).

Consider that 75% of American lawyers are in private practice, and the large majority of those people are self-employed, either as individuals or in partnerships, meaning that they’re not salaried or hourly workers, and thus not included in the BLS wage stats. Diamond is aware of this, and thinks it means lawyers are making even more money than the BLS stats suggest:

Now, these numbers are “employed” lawyers so they do not include solo practitioners or partners who qualify as employers. But the first number is relatively small, approximately 4% on average of all practicing lawyers over that time period. And the second number is likely to skew income higher not lower, so excluding that number does not help the critics case that much. Arguably solos do less well financially (though we don’t know for sure based on the BLS data) so perhaps they cancel each other out.

Factor in higher paid partners and [it’s] likely they [lawyers] have stayed comfortably ahead of inflation.

Steve Diamond, a man who pontificates regularly on the economic status of lawyers, thinks that 4% of practicing lawyers are in solo practice. He produces this estimate by citing NALP data on the employment status of law graduates nine months after graduation. But many lawyers — perhaps most — graduated from law school more than nine months ago. How many of them are in solo practice? According to the ABA, the answer is roughly two out of every five, i.e., approximately ten times as many as the learned professor estimated. And what’s happened to their wages?

Fortunately, we don’t have to guess: the mean earnings (the median is certainly much lower) of solo practitioners have declined by 30% in real terms over the past 25 years, from $71,000 to $49,000 per year, inflation-adjusted.

In other words, if we combine the BLS data on median lawyer salaries with tax data on the earnings of self-employed lawyers, we find that the median real compensation for lawyers – again, not law school graduates, but actual employed lawyers — is surely a good deal lower than it was a generation ago (Of course a small minority of lawyers — those who are equity partners at large firms — have seen their incomes soar, but this fact has no relevance to the average lawyer). Meanwhile, private law school tuition has nearly tripled in real terms over that time, while resident tuition at public law schools has increased by a factor of five, which makes the claim that law students today are better off than those of a generation ago somewhat problematic.

And again, we’re talking about lawyers here, not law school graduates. The gist of Noam Scheiber’s Times article that set Diamond off was that, at law schools such as Valparaiso, a very large percentage of graduates will never actually be lawyers, if being a lawyer means having some sort of sustained career in the legal profession.

Law School Transparency provides a simple way to compare the employment outcomes for graduates of ABA law schools, by compiling, respectively, employment and underemployment scores for each one. The employment score counts how many graduates have full-time bar passage required jobs, excluding putative solo practitioners. The underemployment score reflects the percentage of grads who don’t have full-time professional employment of any type, not merely those who fail to get jobs as lawyers.

These scores are not perfect metrics, since for example Yale’s and Harvard’s relatively low (84% and 89%) employment scores are a product of the fact that some graduates of hyper-elite law schools get unicorn-type non-law employment outcomes. Still, they are good rough and ready guides, especially at the extremes. Speaking of which:

Valparaiso, Class of 2015 ten months after graduation:

Employment Score: 38.2%

Underemployment Score: 37.4%

More than three out of every five Valpo graduates aren’t managing to get any legal job, even though this category includes such dubious employment as the eat what you kill arrangements described in the Times article (such grads are counted as being “employed” by firms, even though the firms don’t actually pay them anything). Valpo also features a catastrophically high under-employment figure, indicating that nearly 40% of the class is either flat-out unemployed, or working retail, like the unfortunate young woman profiled in the piece.

Those are horrendous statistics, but perhaps we shouldn’t expect Professor Diamond, working as he does at a much more exalted institution, to be aware of how badly graduates of schools like Valparaiso are struggling.

Santa Clara, Class of 2015 ten months after graduation:

Employment score: 38.8%

Underemployment score: 39.3%

Three-year loan-financed cost of attendance:

Valparaiso: $194,477

Santa Clara: $269,978

I think we’re done here.