MidTex


The U.S. News & World Report law school rankings have long been criticized for numerous and valid reasons by people who know of what they speak (unlike myself), but I think Res Ipsa has crystalized what criteria should really be considerd when ranking law schools—if the purpose in ranking these schools is to help inform where an aspiring applicant will spend the next the three years of indentured legal servitude.

Namely, return on one’s dollar.

Most law school students could care less about most of the indices USNWR uses to rank law schools, namely the size of a school’s library, median entering GPAs or LSAT scores, per capita expenditures, or even the employment rate for graduates (because what does it matter that you have a job if that job pays far less than the amount of money you just shelled out for the privilege of securing said job). Of much more importance to most law school students is the relative assurance they have that a given law school will provide them with an education that will likely allow them to attain a positive net worth at some point in their lives.

depressing

There are only three law schools in Texas where a graduate will, on average, make more in their first year of practice than they paid in tuition for three glorious years of legal tutelage: UT, Houston, and Texas Tech.

However, I would add two columns to Res Ipsa‘s excellent comparison chart above (and if I weren’t much lazier than Res Ipsa, I’d add in Thurgood Marshall‘s numbers as well): the return ratio of these schools when you factor in room and board (which all of us know who survived law school grossly underestimates the essential “beer” portion of the “board” figure, not to mention all kinds of other significant costs like books, etc.).

hmmmmm

Taking into account room and board, nobody makes enough their first year to make up for what they expended during law school, but some schools fall so woefully low on the this list that I think the fallacy of the USNWR ranking of these schools is revealed.

what a bargain

So, according to USNWR, SMU is the second best school in Texas, but according to the modified return rate ranking, it’s one of the very worst. Same with Baylor (third best according to USNWR, sixth out of eight schools measured according to the modified return rate ranking).

However, USNWR did accurately rank UT as the best law school in Texas, and came awfully close on both Houston (third versus second) and Texas Tech (fourth versus third).

So, all hype and boosterism aside, I think one would have a pretty hard time arguing UT, Houston, and Texas Tech are not the top three law schools in the state. Conversely, it’s hard to rank either Baylor or SMU in the top three when you consider how much longer it will—on average—take a graduate to make back their law school investment.

I freely and anectdotally admit however that—hands down—the most impressive and intellectually-imposing lawyers I’ve ever worked with, against, or for were largely SMU and Baylor grads.

All this aside, it goes without saying that if you graduate in the top ten percentile, have served on a journal (or better yet, been pubished in or been selected to the executive board of said journal), you will likely be able to secure a clerkship somewhere and then go on to make oodles of money in the private sector, if so desired.

* * * MEA CULPA UPDATE * * *

Having had some time this afternoon to reflect on this morning’s rant, I think I have to temper my enthusiasm for the modified return rate metric somewhat. Namely, I don’t think that it is as indicative of the best law schools in the state as it is merely a investment-value measurement.

While I believe that average starting salaries among Texas law schools are misleading because I would posit that SMU, Houston, and South Texas‘s numbers are biased upward because most of schools’ graduates remain in either Dallas or Houston to practice, and St. Mary‘s is largely as low as it is because a large percentage of its graduates remain in San Antonio to practice, average starting salary is still probably a greater reflection of school prestige than is a return rate index.

Under my reasoning put forward earlier today, Harvard, Yale, and Stanford would all likely have much lower return rate rankings than their state school brethren, but no one could argue that these schools are not the best in their respective states, if not the country.

Thx to Res Ipsa

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Wow

Res Ipsa has another great post today detailing the average starting salaries of Texas law school grads. Unsurprisingly, UT topped the list at $101,111 and Texas Wesleyan–the newest accredited law school in the state–provided the foundation for the list at $57,497.

Res Ipsa also includes a fascinating snapshot of a relative salary comparison tool from CNN Money that will help the curious decide if the grass is truly greener on the other side.

As an aside, for any of my readers that are looking to add a talented lawyer to their ranks, you should get in touch with young Mr. Benson Varghese, who runs Res Ipsa Blog and is currently a 3L at Texas Tech. Since debuting his blog in March of this year, it has consistently proven to be a fine legal read with invaluable content for the Texas Bar (of which Mr. Varghese will no doubt soon be a member).

Thx to Res Ipsa

Following up on our earlier discussions of what metric best delineates BigTex vs. MidTex, (Gross Revenue or Profits Per Partner or Revenue Per Lawyer), Tex Parte Blog injected a new contender into the fray: Profitability Index (PPP / RPL). PI measures “whether equity partners are taking home more or less than the average revenue brought into the firm.”

Below, I’ve compiled the numbers for all the BigTex and MidTex shops (in descending GR order) that are more than just single-city or single-practice outfits, or Texas satellites of BigLaw. The outliers (both high and low) for each metric are highlighted.

Laid bare

Despite the thoughtful comments of a poster over at Greedy Texas, I still adhere to the belief that BigTex is more a measure of overall size, and therefore, relative market dominance. While I can’t argue that Fulbright’s PPP, RPL, and PI indices put it much more solidly in line with most MidTex firms, I remain convinced that a firm that brings in some $300 million more than most MidTex shops can’t be labled as anything less than BigTex. I don’t think a credible argument can be made that a firm bringing in some $650 milion per year cannot provide an order of magnitude difference in capability than a firm with a third the business. Inefficient and relatively unprofitable perhaps, but Big nonetheless.

I think the best example of how, perhaps at least PI is not as instructive a measure of a firm’s relative market standing as is GR, is evidenced by comparing the PIs of Akin Gump and Kelly Hart, which on their face, are not terribly disparate (1.41 v. 1.25). However, if you look at their respective GRs, Akin Gump brought in $700 million more than did Kelly Hart during FY 2007.

Thx to Tex Parte Blog

A poster over at Greedy Texas got me thinking about what the best qualitative metric of a BigTex vs. a MidTex firm is. They posit that “no one gives a crap” about gross revenue, and that Profits Per Partner (PPP) and Revenue Per Lawyer (RPL) are all that really matter.

Having examined the gross revenues numbers previously lets compare the PPP and RPL of the firms that matter most to this discussion (i.e., the firms compared last time based on gross revenue alone, and a few others that are more than just single-city shops, or Texas outposts of national/regional firms)

Quan

I noted a few of these firms as tied when their PPP and RPL were inverted and similar. All in all, a fairly surprising ranking (i.e., Winstead being closer in PPP and RPL to Kelly Hart than to, say, Thompson Knight)

However, I still am of the mind that BigTex and MidTex are more accurately terms denoting scale, a measurement for which gross revenue would seem to be the most pertinent metric. So I’d still draw the BigTex/MidTex lines according to gross revenue, but look to the PPP and RPL metrics to determine how efficient a firm is, and how rewarded one might be for their toil.

So of the four BigTex firms confirmed by gross revenue (Akin Gump, Fulbright, V&E, and Baker Botts), it looks like all but Fulbright hold up their end of the bargain on PPP and RPL as well.

Thx to Greedy Texas and the Texas Lawyer

Not chump change

The terms, “BigTex” and “MidTex,” are thrown around a lot to indicate who the top firms in Texas are, often subjectively. Below, see the list of the highest-grossing firms in Texas during FY 2007.

Akin Gump $752 million
Fulbright $649 million
Vinson & Elkins $596 million
Baker Botts $577.7 million
Bracewell & Giuliani $293 million
Haynes and Boone $264.3 million
Andrews Kurth $251 million
Locke Liddell $244.5 million
Thompson & Knight $214.5 million
Susman Godfrey $171 million
Gardere $169.2 million
Jackson Walker $163.5 million

Clearly, the only firms that can truly be referred to as “BigTex” are Akin Gump, Fulbright, V&E, and Baker Botts, who each make multiples in excess of the next highest ranking firms.

“MidTex” then, is plainly populated by Haynes and Boone, Bracewell & Giuliani, Andrews Kurth, Locke [Lord], and Thompson & Knight.

Gardere and Jackson Walker may also be rightfully considered “MidTex” as well, but it is surprising (at least to me) that they are about a $100 million behind the other MidTex firms in revenue.

Most impressive is that Susman Godrey, while having only 85 lawyers, brings in more revenue than Gardere–which has 290 attorneys, and Jackson Walker–which has 321 lawyers. Unsurprisingly, profit-per-partner is tops once again at Susman, coming in at $3 million.

* * * UPDATE * * *

Compare the BigTex revenue numbers to that of BigLaw below and you’ll get an idea of the disparity between the two.

Wow

Thx to Res Ipsa and AbovetheLaw

Happy returns

Following up on yesterday’s post about the 2008 Baker Botts bonus structure, Greedy Texas reports that Thompson & Knight might actually best the venerable Texas partnership for years five and above:

T&K
Class Year…..Bonus at 2,000 Hours

2003………..60,000
2002………..75,000
2001………..75,000
2000………..75,000

BB
Class Year…..Bonus at 2,000 Hours

2003………..50,000
2002………..65,000
2001………..65,000
2000………..65,000

Thx to Greedy Texas

The most painfully humorous clip I’ve seen in a while.

Thx to Simple Justice

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