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Monday, February 11, 2008

Law Firm Salaries v. Law Professor Salaries

According to this recent article, Latham & Watkins is reporting over $2.2 million per partner, an increase of about 20% over last year, despite the market downturn.  I know comparing law professor salaries to big firm partner profits is like comparing apples to, well, Porsches, but my sense is that most law professor salaries do not experience the kinds of increases we have seen in big firm private practice.  I can think of several basic economic reasons.  One might be the fact that there is a certain level of job satisfaction in academia that compensates for lower salaries, but I would imagine that, at least at the partner level, there is a high level of job satisfaction among big firm lawyers as well (though perhaps that's partly because of the money).  Another reason might be the monetary value of our respective services to our respective consumers.  Big companies are willing to shell out the big bucks for quality legal counsel; students are less willing/able to do the same for a quality legal education.  But there is a self-imposed institutional pressure to keep student tuitions low and as affordable as possible that is not entirely economically motivated (see Harvard's attempt here).  Is there something noneconomic going on here?  Are we institutionally afraid of being overpaid (or viewed as being overpaid)?

Posted by Scott Dodson on February 11, 2008 at 09:48 PM | Permalink


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Let me just echo that it is ridiculous to assume that partners at law firms have given up on bettering the system. This is about as silly a comment as I've ever heard, and this is supposed to be from someone intelligent.

Partners at law firms are often the very most pushy and proactive about furthering certain agendas, whether they be through pro-bono work, picking the types of cases they work on, or through the way that they structure transactions or litigate cases.

This thumbing of the nose to law firm partners betrays the know-it-all philosophy that plagues so very much of the academy, whether in law or otherwise. It's poor performance, both for the academy's reputation and for students as a whole.

Posted by: Curtis Strong | Nov 13, 2008 2:01:31 PM

I'm stunned that the concepts of "supply and demand" weren't mentioned once in this thread. Every year the AALS sees 1000+ wanna-be profs attempting to enter the profession. Aside from a handful of top scholars, almost any law professor is easily replaceable for a school. Accordingly, there is no need to pay more than professors are currently making.

Posted by: Joe | Jul 16, 2008 1:35:20 PM

If law professors want more money they could practice law on the side. Their counterparts in biglaw work 80 hours a week and I am sure this exceeds the time spent in class, preparing for class, office hours and writing articles. Even practicing 20 hours a week would have an effect on their income. Lawyers are better suited (based on their profession) to make money on the side than most other academics as well.

Posted by: Hnk | Jul 16, 2008 1:26:24 PM

A law professor's pay is abundant for the work performed.

A professor does not spend as many working hours as an associate or partner in a big law firm and needs not to take all the risks involved. Given the relative job security and lower work requirements, "real" salary is much higher. Arguments advanced above of lower pay is similar to those of a NBA player's salary. Yes, big law partners will have much higher salaries, but a law professor does not worry about such things as obtaining clients.

If a law professor requires an higher salary thats fine, but it should linked to percentage of revenue that professor brings to the university.
Else, the students will shoulder the burden and which will require them to seek higher paying jobs to pay their college loans. As a result law firms would charge higher fees to their clients, who in result would look for cheaper alternatives, like offshore.

Posted by: Logic | Mar 29, 2008 12:57:53 PM

15 hrs per week x 35 weeks per year (if that) = 525 hrs per year in class at most divided by $40k tuition = $76 and and change PER STUDENT PER HOUR + the cost of books in a class of ONLY 5 STUDENTS only it would be CHEAPER per hour to hire a non first year BigLaw Associate to teach. My classes averaged 50 STUDENTS PER CLASS...and law school are NOT FOR PROFIT..TAKE RISKS i.e. contingency cases...ARE SUBJECT TO MARKET ECONOMICS...CLIENTS WHO DON'T WANT TO PAY (whereas student loans are guaranteed and cannot be discharged by anything short of the apocalypse) and SOLICIT FOR DONATIONS...are you kidding me...affordable...law professors whining about salaries...yeah my math doesnt factor in the grueling grading process, bending over to pick the papers off the stais is tough...and your $160k students (all 10-20% of them) work more hours per week than you do per month (as mandated by the ABA) and many others are working for MUCH less if they are employed at all directly after the Bar. Yes, I am sure many prof's are excellent educators, well trained and repectful of their positions effect on the profession...but jeez you are whining like the children on Above the Law. Instead of moaning why don't you advocate for a more transparent education and maybe help to alleviate some of the misery in the profession that caused many of you to flee in to the safe-haven of tenured academia. My brightest profs were all in to policy and none could stand to be in law for more than a year...is that who we want teaching future lawyers?

Posted by: Sam | Mar 26, 2008 2:10:01 PM

Paul's point about comparing salaries to other disciplines is obviously relevant. The most apples to apple-ish comparison would be to profs in other units of the university. After all, on a day to day basis, we do much of the same work as others profs. On that basis, we're mostly overpaid. Just trying complaining about faculty salaries at a lunch with arts-and-sciences profs.

Even if we limit the comparison to other professional schools, we're still doing fine. And, as with law schools, in business schools, some education schools, and other professional schools (physical therapy, clinical psychology, etc), it's possible that a really smart and capable person could make more money as a practitioner rather than a prof.

Further, if we want to look to lawyers outide the university, it's not obvious to me why partners at places like Latham should be any sort of baseline. They're outliers even among lawyers.

Perhaps a better metric (reflecting something like Jason's "changing the world") would draw comparisons with lawyers in government and public interest entities. On that scale, we're also doing pretty well. Law profs aspire to make contributions not so different from elite legislative staffers, interest group lawyers, people in the OLC at Justice, judges, etc., and we're again doing pretty well in terms of salary compared with many of those folks.

To be anecdotal, I spent some time at one of the bigs, and members of my class who stayed there are now partners starting to make seriously big bucks. But, given my lifestyle needs (and preferences), that wasn't realistic for me and others from the class. So we stepped out to other things. Several of them (including one with a PhD) decided to become law clerks at the state courts of appeal (a full-time job here in California). They are doing interesting and important work in a relaxed and self-supervised atmosphere, avoiding the stress of billable hours and client development, enjoying a lot of vacation time, and making almost exactly what I'm making. So, in my little niche, the market has spoken.

Posted by: Ron Steiner | Feb 17, 2008 4:08:30 PM

And, in any case, is that all that is going on?

No, that's not the only thing going on. For example, the legal academy's salaries are inflated thanks to the ABA, which will withdraw accreditation if a school's salaries are too low. But I don't see the comparison with law firm partners as particularly helpful; what we do and they do have almost nothing in common.

Posted by: Orin Kerr | Feb 12, 2008 8:18:57 PM

Orin: I agree to some extent (though even universities operate as businesses in some respects), but what about for-profit schools? And, in any case, is that all that is going on? I tend to agree with Jason: we rarely broadcast our salaries as law firms do (just look at the number of nonreporting schools in the SALT salary survey). Perhaps that is because we pride ourselves on merit and scholarly activity, and, unlike law firms, salaries are seen as a distasteful proxy for those qualities.

A K: Law schools receive money from sources other than tuition. Endowments, donations, funds, legislative budgets. It may be true that some law schools would be unable to pay higher salaries without raising tuition, but that's not true for all law schools. I speak from some ignorance given my limited exposure to the academy, but in these days of running a budget surplus at our school, the possibility of salary raises have never come up.

Paul: You are right that there is probably more than one comparison group. Lawyers is one, but graduate-level academics is another (and my sense there is that law professors are on the high end).

Posted by: Scott Dodson | Feb 12, 2008 1:46:54 PM

Why is the appropriate comparison to law firm salaries? As opposed to, say, salaries in other disciplines?

Posted by: Paul Gowder | Feb 12, 2008 1:21:56 PM

I believe my professors deserved every penny they received and I wish they too could earn bonuses. But, unlike partners in a law firm, professors do not serve businesses with increasing profits and/or hundreds of millions of dollars in capital. As it stands, private law school costs $50K+/year. Many T14 schools do not offer financial aid to the vast majority of theirs students, other than facilitating federal and private loan applications. Students (generally) do not have increasing profits and/or hundreds of millions of dollars from which to pay tuition, and so they must burden themselves with $20K in federal loans and $30K in private loans per year. With the $2K+ monthly loan obligation this creates, students are already forced into the private sector and away from public interest positions and academia.

Where would the money come from to increase professor salaries? It would undoubtedly come from a tuition increase, which would further burden the already over-stretched student populace. I would love to see professors satisfied financially, but I do not see how that is possible without contributing to the tuition cost crisis already identified by the ABA, etc.

Posted by: A K Bay | Feb 12, 2008 9:47:28 AM

"Whereas if you're in biglaw practice, it's basically all about the money -- if you're a partner at Latham, you've given up on any ideas of changing the world, of bettering the system."

So law professors, who spend their timing writing unpeer reviewed scholarship that no one but law professors read, change the world, but partners at a major law firm do not? Ridiculous. Firm lawyers do morally unworthwhile work, but not the teachers who do the work of training them? Strange.

Law professors make very high salaries, even compared to other academics in high paying fields. Throw in the fact that they accept barely any tenure risk (i.e. the risk of not getting tenure and being out of a job), and they start to look overpaid, if anything.

Posted by: Bob | Feb 12, 2008 2:50:18 AM

Law firms are businesses; Universities are not.

For the record, though, I am not afraid of being overpaid.

Posted by: Orin Kerr | Feb 11, 2008 11:19:06 PM

I'd guess that what you're hinting at is right: you're not supposed to have gotten into academia for the money, so pushing for more (which might well get you more) is sort of declasse (imagine accent marks). Whereas if you're in biglaw practice, it's basically all about the money -- if you're a partner at Latham, you've given up on any ideas of changing the world, of bettering the system. (I'd say also that you've given up on having an intellectually interesting and morally worthwhile career, but I suppose that's more arguable.) In any case, because practicing law at the big shops is all about getting more money for your clients, getting more money for yourself is far from declasse -- it's probably admirable, in fact.

Posted by: Jason | Feb 11, 2008 11:00:21 PM

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