The middle class of American lawyers is hollowing out.
Every year since 1967 the IRS has collected and released data about the tax returns of two different groups of lawyers: solo practitioners and law firm partners.
Adjusted for inflation, in 1967 law firm partners earned roughly $US173,000 and solo practitioners earned $US74,580.
Both of these amounts were above the median income, and while partners were wealthier, there was not an unimaginable gap between the two groups.
By 2012, solo practitioners had seen their incomes fall to $US49,130, a 34% decrease, while partners earned $US349,000, a 100% increase.
$US49,130 is not the starting salary for solo practitioners. It is the average income of all 354,000 lawyers who filed as solo practitioners in 2012, including those who have practiced law their whole lives.
By comparison, the average starting salary of a 2012 college graduate was $US44,000 and the median household income in the U.S. was over $US51,000 that year.
And it is not like these lawyers earn less because their jobs are easy: being a solo practitioner is really hard! These lawyers must stay abreast of lots of different areas of the law and help real people with serious problems on a limited budget.
In 2012 partners in law firms earned more than seven times what a solo practitioner earned. These IRS numbers actually understate the discrepancy, because the IRS includes all law firm partners, from small town partnerships to mega-firms in New York.
If you use the average earnings of equity partners from the fifty most profitable law firms the gap widens considerably. In 2012 the wealthiest American law firm partners earned $US1.6 million, thirty-two times what a solo practitioner averaged.
Such is the duality of the information age and income inequality. American lawyers used to be able to count on a middle class existence. Now law school is much more of a high stakes gamble.
Some law graduates may become very wealthy indeed, and some will still be middle class, but many more will be saddled with massive debt and little hope for a steady income.
Adapted from “Glass Half Full: The Decline and Rebirth of the Legal Profession” by Benjamin H. Barton.
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.