Lies, damned lies, and statistics: Lawyer employment and salary surveys conceal more than reveal

Nothing like a couple of lawyer-income stories to heat the blood on a cold morning....

Without a hint of irony, the January 10 Chicago Daily Law Bulletin reported on a salary survey (subscription required) of partners nationwide that concluded that the average law partner compensation in the City of Chicago was $524,000.

This staggering figure was only the ninth highest nationwide. New York, of course, topped the list with partners claiming average compensation of $938,000.

Yet, speaking of New York, on January 10 Yahoo! Finance posted a story from the New York Times (genuflection optional) by David Segal entitled "Is Law School a Losing Game?" The Times article chronicles the travails of Michael Wallerstein, 27, a recent graduate of the Thomas Jefferson School of Law in San Diego, who brought his degree and a quarter-million dollars of student loan debt back to his native New York after graduation.

Wallerstein has found one full-time legal position since graduation. It lasted less than a month and he earned a princely $10 an hour at a small firm in Queens:

[Wallerstein] worked for a manager who seemed to have walked straight out of a Dickens novel. Over a firm-wide lunch, as Labor Day approached, she asked employees to thank her, one at a time, for giving them the holiday off.

"When it was my turn, I said, 'Labor Day is about celebrating the 40-hour workweek, weekends, that sort of thing,'" Mr. Wallerstein recalls. "She said, 'Well, workers have that now so you don't need a day off to celebrate it.'"

Currently Wallerstein works for a temp service "in office space rented on the 11th floor of the Viacom building in Times Square. He sits in a small, windowless room with five other lawyers, all clicking through page after page of documents on computers under fluorescent lights. The walls are bare except for the name of each lawyer, tacked overhead."

If you read the Times article you'll see that Wallerstein is the author of at least some of his own misfortune: He could have attended a school closer to home and possibly forged connections that might have led to more meaningful employment. He certainly seems to have incurred far more debt than he had to, even studying abroad for a time.

Moreover, though Top-Law-Schools.com says that Thomas Jefferson Law School is an institution "on the rise," it remains in the bottom quarter of all law schools as ranked by U.S. News and World Report.

But -- the Times reports -- some graduates of even the most prestigious law schools are not thriving:

Jason Bohn is earning $33 an hour as a legal temp while strapped to more than $200,000 in loans, a sizable chunk of which he accumulated during his time at Columbia University, where he finished both a J.D. and a master's degree.

"I grew up a ward of the state of New York, so I don't have any parents to call for help," Mr. Bohn says. "For my sanity, I have to think there is an end in sight."

One of the many factors that figure into the U.S. News rankings is the percentage of graduates employed after nine months. Folding pants at Macy's or waiting tables at Applebee's counts as employment. According to the Times article, Georgetown created three jobs in its admissions office paying $20 an hour -- and lasting six weeks, just long enough so that the three recent graduates hired for these positions could be counted as 'employed.'

The Times article notes that many law schools, including many not in anyone's Top 40, claim a median starting salary for graduates of $160,000 -- the same claim made by Harvard and Yale. And therein lies the link to the Law Bulletin salary article: These extraordinary income claims, both for new graduates and partners, depend on self-reporting.

You can access the entire Major, Lindsey & Africa 2010 Partner Compensation Survey by following the link in this sentence. The report depends on attorneys responding. If you check out the Methodology Appendix, you'll read that 33,063 partners from around the country were solicited by email. Some 2,959 emails were returned as undeliverable. Only 1,873 responses were received.

Who do you think responded? The ones who were doing great? Or the ones engaged in a grim struggle for survival in an increasingly competitive environment? In case the answers are not immediately obvious, let me ask this a different way: Are you more likely to go to your high school reunion when things are going great -- or when you're unemployed or chronically ill or staggering under crushing debts?

The U.S. News rankings also depend on self-reporting. As the Times reports:

[The U.S. News rankings] are based entirely on unaudited surveys conducted by each law school, using questions devised by the American Bar Association and the National Association for Law Placement. Given the stakes and given that the figures are not double-checked by an impartial body, each school faces exactly the sort of potential conflict of interest lawyers are trained to howl about.

The surveys themselves have a built-in bias. As many deans acknowledge, the results are skewed because graduates with high-paying jobs are more likely to respond than people earning $9 an hour at Radio Shack. (Those who don't respond are basically invisible, aside from reducing the overall response rate of the survey.)

William Henderson, an Indiana University law professor quoted in the Times story says, "Enron-type accounting standards have become the norm.... Every time I look at this data, I feel dirty."

I don't feel dirty. I feel angry. ... And maybe a little jealous, too. Who the heck is really earning a half million bucks out there? And why can't I?