Beware of the bimodal salary distribution curve:
Click the link below (in bold) for a better view.
What are the implications of this chart?
- For law students. Let’s face it: $40K to $55K per year is just not enough to pay down the avg. $85,000 debt (especially as interest rates climb) and still enjoy any kind of lifestyle that a professional degree is presumed to confer. The national median starting salary for a 2 to 10 lawyer firm is $50,000. There are a lot of struggling alumni out there. And do we really need more law schools? For many, getting a JD is a very risky financial proposition, especially when you factor in bar passage.
- For law schools. Because different law schools supply graduates into different modes (roughly tracking US News rank), it is indisputable that lower-ranked schools cannot continue to heap ever higher debt onto their students. On the other hand, if you are Georgetown, NYU, Northwestern, Harvard, Columbia, et al., your current model works just fine. The salary wars make this possible. Yet, 50 to 75 other law schools raising tuition in order to buy their way into the Top 15 is a classic positional competition–and it is socially harmful, with our students bearing the cost. As legal educators, we can do better.
- For law firms. The second mode keep moving to the right because too many law firms refuse to reconsider their business model in light of a continuing surge in demand for corporate legal services. All these firms want Harvard, Columbia, Chicago graduates, etc. and, if necessary, Illinois (top 25%), Indiana (top 15%), Marquette (top 10%), etc. If legal education worked like any other market, Northwestern would be merging with Cardozo, exploiting Cardozo’s capacity and location and leveraging Northwestern’s brand. But law schools are maximizing prestige, not output or profit. Such a merger would be dilutive or break-even at best for the higher ranked school.
There is a lot of commodity corporate legalwork on there; why not bow out of the salary wars, ratchet down the hours to 1800, take work on a flat fee arrangement, focus on better/faster service (thus increasing margins on the flat fees), and literally feast on the human capital willing to take a job in the “death valley” range (i.e., ~$80,000 per year), especially if the hours are sane. The client gets quality and cost predictability, and the well-managed firm can make a lot of money. This is a great opportunity for a firm willing to rethink its business model. Larry Ribstein’s publicly held law firm would be all over this. But any established large firm willing to think outside the box could do it.
You go to law school, most take on high 5 to low 6 figure debt, and expect to have some help paying back the debt if you’re in public interest, or a firm job to cover the student loan debt you’ve carried for the past 7 years. Most schools announce a $75-$100k+ median salary, not telling prospective students it’s a fraction of their alumni who reported that information. Often it’s just those satisfied with their jobs who chose to do so!
A horror story from BU, a school I am considering:
“I’m on a one-woman mission to talk people out of law school,” she tells Law Blog. “Lots of people go to law school as a default. They don’t know what else to do, like I did. It seems like a good idea. People say a law degree will always be worth something even if you don’t practice. But they don’t consider what that debt is going to look like after law school.
“It affects my life in every way. And the jobs that you think are going to be there won’t necessarily be there at all. Most people I know that are practicing attorneys don’t make the kind of money they think lawyers make. They’re making $40,000 a year, not $160,000.”
Lawyers even get divorced over absurd amounts of debt.
Law schools apparently agree, as the Dean of one law school recently noted:
“We should be ashamed of ourselves. We own our students’ outcomes. We took them. We took their money. We live on their money to pay to come to San Diego [where the conference was held]. And if they don’t have a good outcome in life, we’re exploiting them. It’s our responsibility to own the outcomes of our institutions. If they’re not doing well … it’s gotta be fixed. Or we should shut the damn place down. And that’s a moral responsibility that we bear in the academy. It’s a leadership responsibility that each of us has. And damn the U.S. News if it affects our rankings. The kids are not gonna show up. Do you know that LSAT registrations are flat to down this year. That students’ applications to law school are flat to down in a substantial number of law schools. That’s never happened in a downturn in the economy before. They’re catching on. Maybe this thing they are doing is not so valuable. Maybe the chance at being in the top 10% is not a good enough lottery shot in order to effectively spend $120,000 and see it blow up at the end of three years of law school.
Quite frankly, unless you’re in a “top 14″ (Yale down to Georgetown) school — in this economy maybe even just “top 6″ because half of the class at Cornell might not get the market paying (read 6 figure+) jobs — or at a strong regional school in the area you want to practice (Illinois for Chicago, Fordham for NYC, Hastings for CA) you need to think long and hard if law school is a good investment. Going to Chicago-Kent isn’t a bad decision … but going to Chicago-Kent on $100,000 debt is almost always financial suicide. Don’t let spot 60 vs 70 on the US News ranking sway you, even if the research suggests rankings are one of the most important factors for prospective law students…
March 22, 2009 at 11:15 pm |
So all those median salaries they throw out there are lies. How is that legal? How are lawyers only making $40-$50k out of law school and yet somehow prospective students have no clue?. I could make that working 50 hr/wk at a plant!
This is absurd.
March 23, 2009 at 1:48 am |
Usually they say “reported” salaries. Check the link from the law dean above; the schools ADMIT this is going on.
March 23, 2009 at 8:46 am |
I think you’re making one pretty critical assumption–that each student goes to law school for the big bucks. That’s simply not the case. Sure, there are quite a few who only went to law school for that 160K salary coming out–and right now, you can tell who those people are in each class. But there are also people who are genuinely passionate about the law and/or are enthused to practice a specific area of the law. For those people, going to law school is worth it even given a lack of guaranteed salaries or high debt.
March 23, 2009 at 2:13 pm |
These are some very sobering, but helpful points.
The law school choice should not be made lightly given the realities, especially in the current market.
Still, there are a number of other factors in play – like federal loan forgiveness programs for certain public interest callings (along the lines of work for 10 years in a public interest capacity the debt goes away).
There’s also those who would, based on personal constitution, rather work in a challenging occupation that involves work of the mind – even for a lower salary and trailing debt – than go down another route.
Still, the overall glamor of even the top paying positions has to be taken in context – the hours required to earn such salaries may diminish the value of the job in the eyes of many.
The debt issue is key – it sets up a potential paradox as well: accept a scholarship at a lesser school and be free from debt, but have fewer prospects. Go into debt for full tuition at a better school and have a shot at more prospects, but face massive debt if things don’t work out.
March 23, 2009 at 4:18 pm |
“But there are also people who are genuinely passionate about the law and/or are enthused to practice a specific area of the law. For those people, going to law school is worth it even given a lack of guaranteed salaries or high debt.”
My argument isn’t a “BIGLAWORBUST” criticism, it’s that even those going into law for the love of the field or public interest, face extreme uphill battles in paying back loans if like many students, they go into 6 figure debt.
You know, the Obama’s didn’t even pay off their law school debt until a few years before he ran for President. He was lucky and had a New York Times best selling book to help offset the loans. That won’t happen for the 3.4/156 UW poli sci major who goes to Marquette with 85,000 in loans on top of 15,000 from their undergraduate days with credit card debt and student loans. $100,000 later they’re working for 35-40K in Milwaukee (*IF* they get a job) and they are going to have serious trouble paying back that debt.
The average UW student isn’t going to Texas, Jenna, and as a result need to seriously re-consider law school because they’re often going to t3/t4 schools.
March 29, 2009 at 12:26 am |
Several thoughts…
One thing that wasn’t really considered in this post is the LRAP (Loan Repayment Assistance Programs). I realize, however, that the better schools have the more generous programs. However, of course, LRAP is not available to help those who simply have low-paying jobs. You must be working in public service or public interest.
I am a bit skeptical that the average debt is only $85K. I would think it would be at least $100K at most schools.
You shouldn’t go to law school because you can’t think of anything else to do or don’t know what to do with your life. Those are absolutely terrible reasons to do pretty much anything significant, and I have little sympathy for those who go to law school thinking it will magically solve their career problems.
I do think it is odd that so many low-tier law schools even exist. I do not mean to be elitist in saying this, but I know that’s probably what it sounds like or perhaps even is. At some point, I wonder whether people are realistically assessing whether a legal career is right for them. I wonder if people are misled by these schools about what prospects are available. For example, if you go to Cooley’s web site, it sure looks like a great school…even look at their rankings, which they of course put out themselves, which ranks them in the TOP 14!! Many of these schools charge almost as much as an Ivy League education, and that is what is really bizarre to me. If people really want to get their JD no matter the school, I respect that and hope they pursue their goals. But for most others who have other viable career options, why wouldn’t you stop and do the math and realize how many of these low-tier schools are NOT sound investments?
I wonder if the current economic situation will sort of act as a re-adjustment to the number of law schools that are really necessary to put out the number of lawyers needed, and cut out these law schools that truly are ripping (most of) their students off. It does appear that the economy is bringing some changes, slowly but surely, to the big law model and it will be interesting to see this play out.
April 2, 2009 at 4:43 pm |
“For years, law school tuition rose along with big-firm salaries. Between 1990 and 2003, the cost of private law schools rose at nearly three times the rate of consumer prices. The average graduate now leaves with more than $80,000 in debt. In one survey, 66 percent of students said debt prevented them from considering government or public-interest jobs”
-http://www.nytimes.com/2009/04/02/opinion/02thu4.html on the 80K number
April 11, 2009 at 6:18 am |
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