Question about reasonableness of income expectations

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rawlsohard
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Question about reasonableness of income expectations

Postby rawlsohard » Sat Mar 23, 2013 3:12 am

Obviously this depends on the area, but,

Most jobs I can get right now pay $30k. My goal is to attend a high T1 (T25). Is it reasonable to expect to make $60-80k after that? I realize some people talk about making $100k+, but I would consider the JD a good investment if my income was in the $60-80k range. Anything above that would be above my expectations.

The "be wary of T1" (or non-T14) literature I've read seems to talk about being skeptical of promises of six-figure income. I realize that. But very few have said, "you're unlikely to get even a job that pays $60-80k."

This chart seems to suggest that 66% of law salaries (of the class of 2011) are 65k or under. But then, if 33% makes higher, wouldn't you expect the T25 to be in the upper 20%, since ranking-wise anyway it's in the upper 12%? Obviously this doesn't account for differences in student rank, but if all 65k+ hirers of the non-T25 schools are focusing on the top 10% of their classes, that would still only be around 9% of the class of 2011. It seems like this would give reason to be confident in attending a T25.

Is expecting this kind of income from a T25 unreasonable? Should I be more skeptical?

TooOld4This
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Re: Question about reasonableness of income expectations

Postby TooOld4This » Sat Mar 23, 2013 3:57 am

Yes you should be more skeptical and read the fine print of your own sources.

There were approximately 44,000 graduates in 2011. The chart you are relying on states that it is based upon approximate 18,000 reported salaries. Where on the graph do you guess that additional 26,000 people fall? Do you think that law schools hound people who have good employment outcomes to report, or people who are un/underemployed?

Take Indiana Bloomington (number 25 this year). Only 18% of its 2011 class was known to be making $70,000 or more. Over 50% of the class did not report salary. Of the 29 people who are working at firms larger than 100 attorneys (the ones that would pay at or above the range you are targeting), 27 people reported their salary. This means that the "missing" data is almost certainly from the low end of the salary scale.

Look at Law School Transparency for each of the schools you are considering. You will quickly see what the actual outcomes have been.

rawlsohard
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Re: Question about reasonableness of income expectations

Postby rawlsohard » Sat Mar 23, 2013 4:35 am

I am aware of those statistics as well. Is it reliable to treat absence of reporting as necessarily indicative of a low salary? This seems to be an assumption a lot of people use but I question how much you can infer from non-reports. I could imagine reporting my income if I was making $160k, but at something like $60k or $80k I don't think I would care enough to report it. At $40k I could imagine that I would be more likely, because it would fail my expectations.

Of the 29 people who are working at firms larger than 100 attorneys (the ones that would pay at or above the range you are targeting), 27 people reported their salary.


Where does LST list the % of people who reported their salary of the known total of people working at those firms? I can see that the graduates whose work is known to be in the private sector, where the median is $99k, comprised 78 graduates but only 51% of that reported their salary. Should I take this to mean that the unreported private sector salaries are sub-25th percentile (<$78k)?

TooOld4This
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Re: Question about reasonableness of income expectations

Postby TooOld4This » Sat Mar 23, 2013 9:48 am

There may be a some with a good outcome that chooses not to report, but that should not be the assumption. First, there are many reports that schools will hound graduates who have jobs in sectors that are well compensated to report their salary, while students who aren't in those categories get little to no follow-up.

Second, the data from IU-B supports this. The link you posted includes the data you need. The second chart breaks out the the law firm size, the number of people in each type and the number of those reporting salaries. Only 8 of 24 people at firms with 2-10 attorneys reported their salary. None of the 8 solo practitioners did. Almost all of the people at firms with more than 100 did. The 3 in 50-100 attorney firms that didn't report are good candidates for having unreported salaries in the range you are looking for. That hardly changes the overall picture, though. None of the "business" or "academic" job holders reported. These jobs are generally code for "gave up and are doing whatever is necessary to pay rent."

When you really look at who didn't report, you can see the majority do not fall into the good outcome category. That is why an absence of salary data (at least for this school) should be treated as not good outcomes.

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A. Nony Mouse
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Re: Question about reasonableness of income expectations

Postby A. Nony Mouse » Sat Mar 23, 2013 10:23 am

I'm also not sure that rank of school makes a vast difference for getting the $60-80K jobs, because there simply aren't many of them. The chart shows the distribution of salaries - big chunk below $65K, another peak at $160K. That reflects what jobs are out there: big law at $160K (or the equivalent in smaller markets), and smaller firms/government/PI at, say, $40K-60K. Then there is a much smaller percentage of jobs with salaries in between those two. Being a T25 grad isn't going to make the number of those jobs magically increase. Will you have a better shot at the ones that exist than people from lower-ranked schools? Probably, depending on which T25 you're at, and where those jobs fall out when you're looking. But because you might have a better shot at these jobs than some other law grads doesn't mean expecting to make that income necessarily makes sense, when a fairly small percentage of law jobs fall into that salary bracket.

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somewhatwayward
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Re: Question about reasonableness of income expectations

Postby somewhatwayward » Sat Mar 23, 2013 10:50 am

^
This poster is right. The vast majority of jobs fall below 65K or above 100K. There are actually several ways that we know that the lower salaries are underreported. First, schools are allowed to go find salary data themselves to report if the grads don't respond to their surveys. It is much easier to find grads working in six-figure jobs online because their firms list all their associates, and their salaries are a matter of public record. Meanwhile the people who are working in a tiny firm without a website who doesn't respond can't be found, and schools have 0 incentive to track that person down....same with the people working retail. Also, people making lower salaries seem like they would be less likely to report out of shame or to avoid cognitive dissonance (reporting that you're making 30K a year in retail reminds them that law school was a bad decision).

Second, regardless of the reason for the underreporting, we have empirical evidence that the underreporting occurs mainly in the lower paying jobs. Look at this link: http://www.nalp.org/uploads/NatlSummChart_Classof2011.pdf. Go to the breakdown of the number of people in firms of different sizes reporting salaries. You will see that only 41% of people working in firms of 2-10 reported their salaries (or their schools found them and reported them) and only 60% of people in firms of 11-25 reported while over 90% of salaries of people in firms of 251+ reported. You will also see the median salaries of 2-10 person firms and 11-25 person firms are under 65K (based on the people who reported, who may actually have higher salaries overall than the ones who did not) while the firms of 251+ have median salaries over 100K. There are more people who did not report salaries who are working in 2-10 person firms (4,489) than there are people working in firms of 251+ (less than 4K). Thus, that missing data makes a big difference, and it is very likely that the vast majority of those data points will add to the 40K-65K bracket.

This link http://www.nalp.org/salarycurve_classof2011 shows that NALP found a median salary of 60K of the people who reported and it also shows that most jobs are under 65K and most of the rest are over 100K. The missing data, as I mentioned in the last paragraph, will make that 40K-65K hump even taller. As it is 52% of salaries fell into that range, and the missing data would push that up to 60-70% since 15,999 salaries went into that calculation, so adding 4,489 more data points could make a big difference.

There is no support for the conclusion that the higher salaries are underreporting, but there is a lot of support (hypothetical and empirical) for the conclusion that the lower salaries are underreported. It is very unwise, based on this data, to conclude that you will likely earn more than 60K unless you are attending a school that places at least 50% into big law or federal clerkships. Alternatively you can minimize your debt so that taking a 50K job is not the end of the world. Personally I wouldn't attend any school in the 19-25 range without a full ride. I'd have to think about whether I would pay any tuition for Vandy/USC/UT/UCLA. Even though I have a 160K job lined up for the fall, I regret not retaking my 171 to shoot for a Hamilton or Butler at CLS, where I ended up paying about 200K (including COL).

I'm seeing a lot of these 'help me optimistically interpret this employment and salary data - it can't really be this bad for T25 grads' posts recently (no offense to you OP). On the one hand, I am happy that people are at least able to look at the data rationally and get scared rather than just denying that it applied to them like most people in the past. The next step is people actually acting on it (retaking the LSAT for more scholarship money, choosing the full-ride at the decent regional over big debt at the "prestigious" T1, etc).




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