Salary transparency

In the April 2011 National Association for Law Placement Bulletin, NALP Executive Director Jim Leipold discusses the push for more transparency in the reporting of legal employment data for recent law school graduates. I found the following statements about salary data to be the most interesting:

Of all the placement statistics, salary data is of course the most problematic in many ways. Because most schools have job status information for many more graduates than they have actual salary data for, individual school median and average salaries can be wildly misleading (not to mention the fact that the bimodal distribution of starting salaries for new lawyers makes means and medians somewhat meaningless under the best of circumstances). As part of trying to take a hard look at how we handle starting salary data at NALP, with the Class of 2009 we began calculating adjusted mean salaries for both overall starting salaries and for private practice salaries. The adjusted salary figures reflect a statistical process that tries to account for the missing salary figures, which tend to be disproportionately at the lower end of the salary scale. What we found is that without this adjustment or weighting, the national mean starting salary figure is overstated by about 10 percent, and the national mean starting salary for private practice is overstated by about 11 percent.

What does this all mean for prospective law students trying to make an informed decision about which — if any — law schools to attend, or for current students trying to get a handle on how their predecessors fared?

Two things:

  1. You can see the salary distribution curve for the national Class of 2009 here. The first peak largely reflects public sector salaries, as well as salaries at smaller, private law firms. The second peak reflects salaries at the largest law firms. Due to this “bimodal distribution” of starting salaries for new lawyers, the blending of public and private sector salaries into one mean or median results in misleading salary information if these figures are presented in isolation. To make sense of legal employment salary data, at the very least it is necessary to separate public sector salaries from those in the private sector, or better yet the private practice of law.
  2. National salary statistics skew high because most schools are able to collect job status information for many more graduates than salary information.

For the national Class of 2009, only 54 percent of students reporting employment also reported a salary to their law school. The highest national salary reporting percentage over the last eight years is 65 percent. With this in mind, it is no surprise when Jim reports that without a statistical adjustment designed to account for these low reporting percentages, national salary means are inflated.

In light of these observations by NALP, how does the employment and salary information of KU Law stack up? As reported previously on this blog, 108 students reported salaries in the KU Law Class of 2009, or 82 percent of employed students:

  • The mean salary for jobs requiring bar passage was $70,754. Ninety-four (94) percent of KU Law grads in the Class of 2009 with bar passage required jobs reported a salary. When comparing this KU Law mean to the national mean for jobs required bar passage of $96,330, keep in mind that nationally only 61 percent of students reporting such jobs also reported a salary. Why? Students making higher salaries are much more likely to report these salaries to their law schools. For this reason, the $96,300 national mean for jobs required bar passage is not a reliable figure.
  • The mean salary for jobs in the private practice of law was $79,259. Ninety (90) percent of KU Law grads in the Class of 2009 employed in private practice reported a salary.

The national mean for jobs in private practice was $115,254, but on the strength of only 61 percent reporting. Again, unreliable.

  • And finally, the mean salary for public sector jobs was $50,666. Eighty-eight (88) percent of KU Law grads in the Class of 2009 employed in the public sector reported a salary.

The national mean for public sector jobs was $50,916, but was based on only 55 percent reporting.

One hundred and five (105) KU Law graduates reported salaries in the 2010 class. This represented 80 percent of employed graduates. We will publish a breakdown of Class of 2010 salaries similar to the 2009 analysis above when it is available in June.

Todd Rogers, Assistant Dean for Career Services