The Myth of the Upper-Middle-Class Lawyer

Volume 29 Number 5

By

Nicole Black is an attorney and vice president of business development and community relations at MyCase, a cloud-based law practice management system. She is an author and columnist and founder of lawtechtalk.com.

It used to be that becoming a lawyer was considered a surefire way to ensure economic and social success. A law degree was viewed as the ticket to a life of comfort and prestige. Those days are no more. Newly minted JDs face an unpredictable, debt-laden future—a future where even the best and brightest graduates are sometimes finding it difficult to obtain volunteer entry-level legal positions, let alone the six-figure salaries that once awaited those graduating at the top of their class from first-tier law schools.

How bad is it? Worse than you might think. New graduates are seemingly so desperate for legal experience that in May 2012, when Gilbert & O’Bryan LLP, a Boston-based law firm, advertised a full-time associate position paying only $10,000 per year with the possibility of additional income on a commission basis, the firm received 32 applications within just one week.

And this phenomenon isn’t limited to Boston. As Liz Shura, a Brooklyn-based solo practitioner at the newly formed Law Offices of Liz Shura and recent law school graduate, explains: “For new lawyers, things are so rough that within two weeks of sending out my law firm announcements, I had three inquiries from recent law grads about employment, even though I am neither hiring nor necessarily expecting to make much of a profit in 2012.”

 

The Changing Legal Job Market

But is the legal job market really all that different than it used to be? Do today’s law graduates face greater challenges than those in the past? The unfortunate truth is that they do, according to recent statistics. There are simply too many graduates and not enough jobs.

Even so, law schools continue to churn out new graduates, and most are burdened by significant student loan debt. According to FinAid.org, 90 percent of the 48,000 current law students will graduate with student loan debt, and the projected average debt owed by recent graduates has increased 14 percent over the last four years—it now amounts to approximately $91,100.

To complicate things further, the legal job market has declined significantly since the recession hit in 2008. According to seasonally adjusted data from the U.S. Bureau of Labor Statistics, the legal services sector has lost some 54,000 jobs since May 2008. Not surprisingly, entry-level legal jobs have not been immune to this trend. As reported in the most recent annual survey from the National Association for Law Placement (NALP), only 85.6 percent of 2011 law graduates were employed by February 2012. This statistic is the lowest percentage since 1994 and represents a substantial decrease from a peak employment rate of 92 percent in 2007. According to Economic Modeling Specialists Int., a labor market analysis firm, nearly twice as many law students passed the bar (53,508) in 2009 as there were job openings (26,239).

 

Was There Ever a Guarantee?

But even if the job market has changed, was it ever reasonable to expect an upper-middle-class income from a law degree? After all, according to the Occupational Employment Statistics Survey of the U.S. Department of Labor’s Bureau of Labor Statistics, the median pay for lawyers in 2010 was $112,360, meaning that 50 percent of lawyers included in the survey earned less than that amount. And the legal profession’s collective lack of earning potential isn’t a new trend. In fact, in 2007 the Wall Street Journal reported that the starting salaries of lawyers had stagnated, and that the inflation-adjusted average income of solo practitioners—who represent one-third of U.S. attorneys—has remained flat since the 1980s.

For this reason, some people, such as Christina Crudden, a Philadelphia-based solo practitioner at the Law Offices of Christina W. Crudden, believe that a law degree has never been a guarantee of success and that it is the expectations of recent graduates, rather than the job market, that have changed:

Unrealistic expectations seem to be the source of a lot of the outrage that we’re hearing by those who feel ripped off by their law school experience. No one ever said that graduating from law school would insulate you from a recession, guarantee you a nice life, or do anything other than allow you to sit for the bar exam. A more realistic picture of the earning potential of an average attorney, especially in the first five years or so, would deter those people who are only in law school for the promise of a guaranteed upper-middle-class lifestyle.

However, others disagree, contending that between high student debt ratios, the ailing economy, and the rapidly changing legal landscape, it is an entirely new ball game for recent graduates. For example, Joseph Rockne, a Seattle-based solo attorney at the Law Office of Joseph L. Rockne, PLLC, explains that recent graduates face far greater challenges than he did as a newly admitted attorney in the early 1990s:

It’s a different world for today’s grads. The debt loads that they have are simply too high. But the biggest problem they face is that they are not needed. When I first started as a law clerk, I was needed because legal research was done at a law library. Partners did not have time for that. Motions and pleadings were drafted from scratch. Today, I do things on my computer in minutes that took me a full day to do 20 years ago. I don’t need the law student/law grad to do that work for me. I don’t have any idea how they are going to break in.

Rockne’s not alone in this assessment. Carolyn Elefant, a longtime solo practitioner and noted author of Solo by Choice: How to be the Lawyer You Always Wanted to Be (LawyerAvenue Press, 2008), agrees that technology has replaced many functions that used to be performed by entry-level attorneys:

When I was practicing in the 1990s, the market was up but contract work was also a fallback—and there were some lawyers earning low six-figure incomes from document review projects. That, too, has disappeared because of technology and offshoring.
 

Technology: The Great Leveler

Few would disagree with Elefant’s and Rockne’s observations—it is virtually indisputable that technology has displaced many entry-level legal functions. But, at the same time, technology may also be the saving grace for new graduates.

This is because technological innovations have the potential to greatly reduce the costs of practicing law, as explained by Mitch Kowalski, a solo practitioner in Toronto and the author of the recently published book Avoiding Extinction: Reimagining Legal Services for the 21st Century (ABA, 2012). Kowalski contends that despite the lack of entry-level legal jobs, newfound technologies, including Internet-based tools, have leveled the playing field, making it substantially easier for solos and small firms to compete with large law firms in ways never before seen:

The greatest challenge is an oversupply of lawyers, coupled with a lack of jobs at law firms. I started practicing during the recession of the early 1990s. It was hard to find work in a law firm at that time, but nearly everyone found a job. Now there are fewer law firm jobs and more graduates—a bad combination. However, new grads are much better off in terms of the technology that is now available to manage their own practices, which helps reduce overhead, increases mobility, and presents new opportunities to market themselves.

In other words, technology may present recent graduates with newfound opportunities to start their own law practices with minimal up-front investment. For example, mobile devices can be used for voice-to-text transcription, thus replacing a function once provided by secretaries. Similarly, lawyers can accomplish an assortment of tasks using a smartphone or a tablet—tasks that once required the use of large, costly equipment such as copiers, scanners, and fax machines.

Not surprisingly, given the abysmal job market, many young lawyers are taking advantage of low start-up costs by going solo. In fact, NALP reported that the number of recent law graduates hanging up a shingle increased from 3.3 percent in 2008 to 6 percent in 2011.

 

Recent Graduates Forge Their Own Path

Faced with one of the worst legal job markets in years, many recent graduates have made the choice to hang up a shingle because they are simply out of options. For some, this decision was made long before graduating law school, while for others, it was a long and winding journey that was anything but straightforward.

Brian Mekdsy, a solo practitioner with a newly established virtual law practice based in Marlborough, Massachusetts, took the less direct path. He was comfortably entrenched in a preexisting career in IT when he graduated from law school in 2009, right after the bottom fell out of the legal job market.

For Mekdsy, the prolonged recession and visions of increased competition were the impetus behind his transition to a career as a sole practitioner:

After graduation, I decided to put the career transition on the back burner until the market opened back up. But as more time went by and the stubborn job market persisted, it became clear to me that whenever the job market did open up, I’d be competing not only with experienced attorneys, but with these new grads who took the bar months ago, rather than 2+ years ago. So even though I never planned on going solo, I decided that if I was ever going to use my degree, the best solution for me was to go out on my own.

So, like many other young lawyers, even though he had never planned to open a solo practice, circumstances beyond his control led him down that path.

In comparison, Leo Mulvihill Jr., a 2010 law school graduate, is a small firm attorney with a traditional bricks-and-mortar law practice in Philadelphia who planned to go solo even before he graduated from law school. Despite knowing how difficult it would be, Mulvihill hung up a shingle because it’s what he’d wanted to do for most of his law school career:

I always wanted to own my own law practice. When I was a newly minted 1L, I thought that the big firm life was the only way to go, what with six-figure salaries and all the prestige that comes with working in a 52-story office building downtown. However, I quickly realized, after hearing stories from lawyers working in such firms, that big law was not for me. During my third year of law school, although I sent out applications to law firms, I also began to put together a business plan to open a law firm, so when I graduated and passed the bar, I was ready to go.

And so, immediately after law school, Mulvihill opened his law firm, Mulvihill & Rushie, LLC, in the Fishtown district of Philadelphia, Pennsylvania, with his partner, Jordan Rushie.

Similarly, Josh Camson realized while still in law school that starting his own practice was the right choice:

During law school I had every intention of becoming a prosecutor. But it just didn’t pan out. I ended up as a trial court law clerk, and after watching the DA’s office function and seeing how defendants are treated in the system, I decided I could do more good as a defense attorney.

So when he graduated in 2010, he established a law firm with home-based offices, CamsonRigby, LLC, with his partner Erick Rigby, in Washington, Pennsylvania, a suburb of Pittsburgh. Because their practice is beginning to grow, he and his partner are in the process of transitioning to a brick-and-mortar office. But even though the firm is growing, it hasn’t been easy. Camson graduated with significant student loan debt, and making ends meet is a constant struggle: “By far, the biggest challenge is bringing clients in the door. We plan on getting court-appointment work, but that’s not unlimited. And it doesn’t pay very well. So we are always concerned about making sure the phone rings and clients keep coming in.”

For Mulvihill, who also has significant student loan debt, it hasn’t been easy either. He explains that one of the biggest hurdles a young solo faces is financial: “If you’re an average law student, you’ve taken out around $100,000 in student loans. How’s a law student supposed to invest in their practice—an office, bar dues, admission fees, computers, legal research products, CLEs, law books, suits, ties, shirts, etc.—when they’re already a grand in the hole at the beginning of every month?”

Nevertheless, even though he faces an uphill battle, Mulvihill wouldn’t change a thing:

Now, I enjoy the freedom that comes with running my own practice. While I’m still in the office every day between 7:30 and 8:00, I’m able to come and go as I please, without having to answer to a managing partner. Every client that I help is my client, not the firm’s client. I feel like I’m taking lawyering back to its roots, back when lawyers knew their neighbors and were heavily involved in the community. That’s what I’m dedicated to doing, and solo practice allows me to do just that.

So even though the new generation of lawyers may have it tough, they’re making the best of a bad situation. In the long run, perhaps their tenacity and innovative spirit will make the profession a better place for the rest of us. And, who knows, we might just learn something from their efforts. Imagine that.

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