Lawyer Salaries Around the World and a Lesson in Supply and Demand

The other day, I shared an infographic which provided (some) data on legal salaries in the US. Continuing on the theme, below is an interesting look, including some baselining to dollars and weighting by a cost of living adjustment, at legal salaries around the globe courtesy of llminfo.com (via ATL). I will let the graphic speak mostly for itself, but one thought I had while looking it over is that it doesn't necessarily do a good job of identifying which markets have supply and demand issues.

Of course, amateur economists in the audience could rightly point out that salaries are generally based, at least in significant part, on a function with supply and demand in job markets serving as major inputs.

However, as recent job-searchers in the legal market can attest, supply and demand forces in the legal market are unnaturally subverted by the legal profession itself. For example, the first year salary structure system under which firms refuse to adjust salaries downward even when there is a glut of labor for fear of losing top recruits, prestige points, the ability to bill certain rates, etc. etc. etc. leads to a lack of adjustment to actual market conditions. This of course has a trickle-down impact on lower-end legal work, as those markets become flooded by the refusal (not rightly or wrongly it should be said; just not in line with the tidy Econ 101 version of job markets) of top firms to adjust to the market.

How is this all relevant? Legal markets in other nations represented in the graphic (though maybe not all - my knowledge on this point is limited to my experience with firms, and contacts with lawyers and trainees, in the UK and Germany) have far less volatile legal employment markets. There are many potential reasons from this, ranging from the fact that there are far fewer schools, and therefore graduates, in those nations, to the fact that there isn't easy loan money in those nations leading to over-enrollment to law school statistic inflation to trainee contracts and innumerable other variables which could comprise several posts in their own right.

The bottom line for purposes of this post is that, as noted above, job prospects for students outside the US might be better, irrespective of dollar figures (adjusted or otherwise) because graduates in those nations are much more certain of finding work upon graduation. While many people go to law school for a chance at the big time, many other would happily trade unsure odds at hitting the lottery for a punched ticket guaranteeing employment at a living wage (plus some cushion for their troubles). A lot of this analysis is, of course, colored by the experience of the past few dreadful years. And this graphic is for lawyers in general, not recent grads. I think readers will nonetheless understand the point about relative certainty being worth a few dollars to most people.

Without further ado: