For some time, I’ve suggested that law schools provide a cautionary tale for the rest of us. With many graduates loaded down with big debt and with few prospects for taking jobs that actually require the degree, some schools are beginning to think the unthinkable – should they consider closing? They may not have a choice – students aren’t stupid, and to go deeply into debt for a degree that doesn’t open doors isn’t an investment anybody should be asked to make.
Meanwhile, elsewhere in the world of the law, firms have announced eye-popping salary increases for new associates, with the more prestigious among them offering the first base-line raise for new associates since 2007. Meanwhile, profits for the more prestigious partnerships have increased, with some sources reporting that top partners at prestigious firms such as Cravath, Swain and Moore can pull in over $3 million per year. Still, there are no guarantees, with those who were once at the top of the profession sometimes stumbling badly. And it’s hardly going to be welcome news for corporate general counsels, who resist paying huge amounts of money for on-the-job training for young lawyers.
This schism in the legal profession is reflective of the trend toward what I call the ‘hourglass economy.’ This reflects income growth at the top of the income distribution and numbers growth at the bottom, with a hollowed out middle. Those with rare or valuable skills are well-rewarded, while those with more fungible or less prestigious talents fight it out to glean some sort of living at the bottom.
For the less-prestigious law firms, the lesson is that fewer students are likely to sign up to join a badly paid crowd of others just like themselves.