Thursday, August 11, 2016

The first AALS placement bulletin of the 2016-2017 hiring season

I am struck by how many schools are interested in some aspect of criminal law/procedure and also in evidence.  Health law is also in demand this year.   I'm encouraged to see a number of schools back in the market for tenure-track faculty who had been out for awhile.  More next week.

August 11, 2016 in Advice for Academic Job Seekers, Faculty News | Permalink

Benjamin H. Barton Responds to Critics of Solo Practitioner Income Estimates: "IRS and Census Data Not that Far Apart Upon Closer Inspection"

The following is a response from Professor Benjamin H. Barton to critiques and questions about his use of IRS data to estimate solo practitioner incomes. It has not been edited or altered from the form in which Professor Barton submitted it.

IRS and Census Data Not that Far Apart Upon Closer Inspection

On July 25th Professor Stephen Diamond criticized my use of IRS income statistics to discuss the earnings of solo practitioners on his blog.  I responded to Professor Diamond in the comments.  On July 26, 2016 Professor Michael Simkovic published a number of critiques here.  Two days later Professor Simkovic followed up with a second post asking me a series of questions and challenging me to respond to both of his posts.  Here I accept Professor Simkovic’s invitation.

Below I explain more about the IRS data and how I use it, but I will not bury the lede.  The data that Professors Simkovic and Diamond use to criticize my work, ACS data for lawyers who are in the category of “self-employed, not incorporated,” is not appropriate data for defining the earnings of solo practitioners.  That Census category likely includes two very different types of self-employed lawyers – solo practitioners (the lowest paid lawyers in private practice) and law firm partners (the highest paid lawyers in private practice).  The Census Department does not make it easy to figure out exactly which lawyers are counted in the category of “self-employed, not incorporated,” but combining this definition with this one and looking at the ACS form itself it seems pretty clear that partners in law firms are included in this category.[i]

Because the ACS data includes an indeterminate number of partners and solos, the average earnings in that category ($165-200,000) are a misleading proxy for the earnings of American solo practitioners.  If there was a data category of “professional baseball players” that included minor league (low paid) and major league (highly paid) baseball players, and there was no way to tell how many of each were in the sample, you could not use the average earnings of “all professional baseball players” as a proxy for minor league salaries, since some members of the sample earn much, much more than other members of the sample.

The ACS data is inappropriate, but is the IRS data better?  I use the IRS data in my book, Glass Half Full – The Decline and Rebirth of the Legal Profession (Oxford 2015) and in later work to talk about several trends in the market for legal services.  Here is an updated version of a chart I first created for the book:

Barton Graph

Continue reading

August 11, 2016 in Legal Profession, Weblogs | Permalink

A few problems with coverage of the solo practitioner income debates

Some news sources claim that I think solo practitioners are "tax cheats."  The estimate that small business owners underreport their revenue and over-claim on expenses comes from the Internal Revenue Service and the Government Accountability Office, not my imagination.  It’s inappropriate to say that I’m claiming that solo attorneys are tax cheats.  I'm simply explaining the IRS's position on biases in IRS data--something that anyone who uses this data should be sure to note.

At least one source has claimed that ACS income data include business revenue rather than business net income or profits, citing Professor Barton as its source.  This claim is incorrect.  

The Census defines Self-employment income as follows:

"self-employment income includes net money income (gross receipts minus expenses) from one’s own business, professional enterprise, or partnership. Gross receipts include the value of all goods sold and services rendered. Expenses include costs of goods purchased, rent, heat, light, power, depreciation charges, wages and salaries paid, business taxes (not personal income taxes), etc.”  See pg. 80

Perhaps the journalist misunderstood Professor Barton.  I've requested corrections.

UPDATE:

Aug. 15, 2016.  Thanks to the folks at Thomson Reuters for posting corrections.  Professor Barton responded, and I replied.

August 11, 2016 in Guest Blogger: Michael Simkovic, Legal Profession | Permalink

Wednesday, August 10, 2016

U of North Texas law school in Dallas denied provisional accreditation by ABA

An ominous development for the new law school at UNT.  Initially, a public law school in Dallas seemed like a good idea--a "first," until Texas A&M acquired Texas Wesleyan, also in Dallas/Ft. Worth.  A&M has made a big investment in the school and the faculty, and A&M is a much stronger school "brand" in Texas than UNT. 

August 10, 2016 in Legal Profession, Of Academic Interest | Permalink

Monday, August 8, 2016

10 Most-Cited Legal Ethics/Legal Profession Faculty, 2010-2014 (inclusive)

Once again, this draws on the data from the 2015 Sisk study:  

Rank

Name

School

Citations

Age in 2016

1

Deborah Rhode

Stanford University

1080

64

2

David Luban

Georgetown University

  930

67

3

William Simon

Columbia University

  630

69

4

Bruce Green

Fordham University

  530

61

5

David Wilkins

Harvard University

  440

60

6

William Henderson, Jr.

Indiana University, Bloomington

  400

54

7

Stephen Gillers

New York University

  330

73

8

W. Bradley Wendel

Cornell University

  280

47

9

Peter Margulies

Roger Williams University

  260

60

 

Russell Pearce

Fordham University

  260

60

   

Other highly-cited scholars who work partly in this area

   
 

Ronald Rotunda

Chapman University

  590

71

 

Robert W. Gordon

Stanford University

  520

75

 

Richard Painter

University of Minnesota

  310

54

August 8, 2016 in Faculty News, Rankings | Permalink

Friday, August 5, 2016

June LSAT takers down less than 1% from last year (which was up over 6% from the prior year)

The latest data from LSAC here.   For 2015-16, LSATs taken were up a bit more than 4% from the prior year, while applications were up about 1%.   So what does this latest data on June test-takers mean?  Probably that this year will be like last in terms of volume of applications.  Stability in the applicant pool is, of course, enough for schools to plan their budgets into the future and do faculty hiring.

August 5, 2016 in Advice for Academic Job Seekers, Legal Profession, Of Academic Interest | Permalink

Wednesday, August 3, 2016

Professor Choudhry continues to pursue a grievance with Berkeley's Committee on Privilege and Tenure

His letter, supplied by his lawyers, is here:   Download 2016-08-01 -- Ltr to Paxson

I do wonder when some other Berkeley faculty are going to start speaking up about this case.   Nothing in the public record suggests that anything that has transpired comes close to grounds for revoking tenure, and the fact that this issue was only raised after political pressure from the President of the UC System casts a pall over the fairness of these proceedings.  The Privilege and Tenure Committee of a great university ought to stand up to this political bullying.

UPDATE:  A reader points out that Berkley Law Prof. Eric Rakowski did speak out about this several months ago.  Kudos to Prof. Rakowski, I hope his colleagues will follow suit; members of the law faculty, in particular, ought to be at the forefront of defending the values of fair process in a matter like this.

August 3, 2016 in Faculty News, Of Academic Interest | Permalink

Tuesday, August 2, 2016

More on the uselessness of ranking law reviews by Google Scholar h-indices

The other day I remarked on what should have been obvious, namely, that Google Scholar rankings of law reviews by impact are nonsense, providing prospective authors with no meaningful information about the relative impact of publishing an article in comparable law reviews.  (Did you know that it's better to publish in the Fordham Law Review for impact than in the Duke Law Journal?)  The reason is simple:  the Google Scholar rankings do not adjust for the volume of output--law reviews that turn out more issues and articles each year will rank higher than otherwise comparable law reviews (with actual comparable impact) simply because of the volume of output.

When Google Scholar rankings of philosophy journals first came out, a journal called Synthese came out #1.  Synthese is a good journal, but it was obviously nonsense that the average impact of an article there was greater than any of the actual top journals in philosophy.   The key fact about Synthese is that it publishes five to ten times as many articles per year than the top philosophy journals.   When another philosopher adjusted the Google Scholar results for volume of publication, Synthese dropped from #1 to #24.

Alas, various law professors have dug in their heels trying to explain that this nonsense Google Scholar ranking of law reviews is not, in fact, affected by volume of output.  I was initially astonished, but now see that many naïve enthusiasts apparently do not not understand the metrics and do not realize how sloppy Google Scholar is in terms of what it picks up. 

Let's start with the formula Google Scholar uses in its journal rankings:

The h-index of a publication is the largest number h such that at least h articles in that publication were cited at least h times each. For example, a publication with five articles cited by, respectively, 17, 9, 6, 3, and 2, has the h-index of 3.

The h-core of a publication is a set of top cited h articles from the publication. These are the articles that the h-index is based on. For example, the publication above has the h-core with three articles, those cited by 17, 9, and 6.

The h-median of a publication is the median of the citation counts in its h-core. For example, the h-median of the publication above is 9. The h-median is a measure of the distribution of citations to the articles in the h-core.

Finally, the h5-index, h5-core, and h5-median of a publication are, respectively, the h-index, h-core, and h-median of only those of its articles that were published in the last five complete calendar years.

Obviously, any journal that publishes more articles per year has more chances of publishing highly-cited articles, which then affects both the h-core result and the h-median result.  But that's only part of the problem, though that problem is real and obvious enough.   The much more serious problem is that Google Scholar picks up a lot of "noise," i.e., citations that aren't really citations.  So, for example, Google Scholar records as a citation any reference to the contents of the law review in an index of legal periodicals.  Any journal that publishes more issues will appear more often in such indices obviously.   Google Scholar picks up self-references in a journal to the articles it has published in a given year.   Google Scholar even picks up SSRN "working paper series" postings in which all other articles by someone on a faculty are also listed at the end as from that school.   (Google Scholar gradually purges some of these fake cites, but it takes a long time.)   Volume of publication inflates a journal's "impact" ranking because Google Scholar is not as discerning as some law professors think.

August 2, 2016 in Advice for Academic Job Seekers, Of Academic Interest, Professional Advice, Rankings | Permalink

Thursday, July 28, 2016

Some questions for Professor Benjamin H. Barton about his use of IRS data to estimate solo practitioner incomes (Michael Simkovic)

After Tuesday's post explaining why IRS schedule C data dramatically underestimates incomes for solo practitioners and other sole proprietors, Professor Benjamin H. Barton emailed to indicate that his views remained unchanged and he did not intend to respond beyond his previous comments on Professor Stephen Diamond's blog.  Barton's comments did not address many of the issues I raised. 

On Wednesday, I asked Professor Barton to consider the following questions:

1) Do you think that 20 million or so U.S. small business owners are living below the poverty threshold for a 2 person household?

2) Do you think the IRS is wrong about its own data and schedule C does not in fact understate net income?  Why do you think that you understand IRS data, IRS enforcement capabilities, and the level of tax evasion better than the IRS?

3) Do you think that everyone who files schedule C has no other sources of income?

4) Do you think that Treasury and JCT estimates of tax expenditures are way off and exclusions and deductions from tax concepts of income are negligible?

5) If apples to apples comparisons using schedule C data show that legal services sole proprietorships are more profitable than 97 percent of sole proprietorships, is that something you should mention?  Would you at least agree that using schedule C data for legal services and census data for everyone else is a methodological error?

Professor Barton has not yet responded.

UPDATE:

Aug. 11, 2016. Professor Barton responded without specifically answering the questions above, but generally conceded that IRS data is problematic.

Aug. 15, 2016.  I replied to Barton.

July 28, 2016 in Guest Blogger: Michael Simkovic, Law in Cyberspace, Legal Profession, Of Academic Interest, Science, Weblogs | Permalink

Tuesday, July 26, 2016

How much do lawyers working in solo practice actually earn? (Michael Simkovic)

In 2015, Professor Benjamin Barton of the University of Tennessee estimated for CNN.com, and Business Insider that attorneys working in solo practice earn an average of slightly less than $50,000 per year.  Barton made similar estimates in his book, “Glass Half Full.”  Professor Stephen Diamond of Santa Clara argues that solo incomes are quite a bit higher. (Barton responded in the comments section).

There is little doubt that solo practitioners typically earn substantially less than lawyers working in large Wall Street Law firms.  However, a closer reading of the Internal Revenue Service data on which Barton relies and Census data both suggest that solo practitioner average (mean) annual earnings are likely closer to $100,000.  

 

    I. Average (Mean) Incomes of Lawyers: Census Income Data vs. IRS Schedule C Net Income Data

According to the U.S. Census Bureau’s American Community Survey, average (mean) total personal income for lawyers who are “self employed, not incorporated” (a proxy for those in small legal practice) was around $140,000 in 2012 and 2013.  For those who were self-employed, incorporated (a proxy for those who are owners of larger legal practices) average total personal income was around $180,000 to $190,000.  These average figures include those working part time.  Restricting the sample to those working full-time increases average earnings for “self employed, not incorporated” lawyers to around $160,000 to $165,000 and for the “self-employed, incorporated” lawyers to $185,000 to $200,000.

Barton based his earnings estimates on average “net income” data from the Internal Revenue Services Statistics of Income for Non-farm Sole Proprietorships  for “Legal Services (NAICS Code 5411)”.  This data is based on Schedule C of form 1040, which is used to calculate one of several sources of income on an individual tax return (“Business Income or Loss”). 

Looking at the same IRS schedule-C net-income data for all non-farm sole proprietorships and applying Barton’s reasoning suggests that in 2013, 24 million American small business owners earned an average (mean) income of $12,500.  This is barely above the poverty threshold for a 1 person household, and considerably lower than average (mean) earned income figures for all Americans reported by the U.S. Census’s American Community Survey (around $47,000 including only those who are employed in some capacity, and $22,000 averaging in everyone—children, the retired, and those not in the work force).

 

    A. IRS Schedule C Data Is Biased Downward:

What explains the large discrepancy between low IRS sole proprietor net income data and higher Census earnings data—for lawyers and for everyone else?  There are several problems with IRS sole proprietor data that are likely to lead to dramatic underestimation of individual earnings. 

Continue reading

July 26, 2016 in Guest Blogger: Michael Simkovic, Legal Profession, Science | Permalink