What you're looking at is the bimodal distribution of starting lawyer salaries. If you integrated up the area under the right lobe, you'd figure out pretty quickly how many lawyers are working in "big law," and if you compared that number to the number graduating from top-U.S. News-ranked law schools, you'd get a pretty good idea of where in the U.S. News rankings your chances of making the big money fall off dramatically.
This distribution can be interpreted in a number of ways. But perhaps the simplest explanation is that the demand for legal services from large corporations is concentrated on the supply for a handful of top law firms. Why is this? Because it's very difficult to measure the quality of legal services.
How could you change this? For starters, you could change the rules of professional ethics that prevent lawyers from partnering with clients to provide services. If lawyers and clients could share equity, their interests would be more aligned, and billable hours and pedigree would be less necessary as proxies for quality.
Via Greg Mankiw
Comments