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Saturday, March 16, 2013

Is Law School Worth It?

Washington Lawyer (Mar. 2013):  Wash LawyerPrice and Perils of JD: Is Law School Worth It?:

Rocked by a brutal job market and a huge and growing student debt, an increasing number of young lawyers have been asking themselves the same question: Is law school worth it?

The case against law school is regularly made in the national media and by Internet bloggers. An article in Forbes magazine last year went so far as to declare: Why Attending Law School Is the Worst Career Decision You’ll Ever Make. Even the ABA has weighed in with concerns. And the issue has obviously large implications for not only students, but law schools and the profession in general. 

Based strictly on economics, investing in a legal education seems increasingly hard to justify. Only a fraction of graduates these days are finding full–time jobs that require a law degree, and salaries are declining. While there has been some recent improvement, the starting salary for a lawyer in private law practice has fallen 35% since 2009, according to a July 2012 report of the National Association for Law Placement. A select few graduates continue to make big money at large firms—as much as $160,000 a year—but those jobs also are getting scarcer as law firms have cut back. 

Many more young lawyers work temporary positions doing document review or other contract work that, aside from lower pay, provides no job security or benefits. Public sector jobs are shrinking because of a federal hiring freeze and budget problems at the state and local level. Nonprofits are too cash–strapped to hire public interest lawyers. More and more graduates are taking jobs outside the law, not out of choice but of necessity to pay the bills.

Legal education costs have soared, meanwhile. Average tuition at a private law school has quadrupled in the lifetime of students graduating this spring, with even sharper increases at public institutions. Including living expenses, the cost of law school now averages between $150,000 and $250,000, much of which is debt-financed. The average debt for students who graduated from a private law school in 2011 was $142,565, which does not include loans they may have racked up as undergraduates. The upshot: Rising costs and declining earnings have many students approaching their very own fiscal cliff. ...

The changing economics of the marketplace is starting to shake a long–held belief that a law degree is a valuable credential, even for those not necessarily interested in practicing law. For years a legal education was touted as a versatile and marketable postgraduate experience for the undecided. Today, lawyers are finding that a law degree is closing rather than opening doors, especially in jobs in business. Employers are skeptical of unemployed lawyers who are not using their law degree in a traditional way. Some also are concerned that lawyers will bolt once they find a legal job. ...

Besides high fees, law schools have been accused of inflating their ability to place students in legal jobs after graduation. Even after the recession hit, many ABA–accredited law schools continued to report that more than 90% of their graduates were getting jobs soon after graduation. It turns out that they were including graduates holding down nonlegal jobs, even temporary ones. ... American University reported that more than 80% of its law school graduates in 2009 and 2010 had found jobs within nine months of graduation. Despite the recession, the school reported that 76% of the class of 2011 still found jobs, although the more detailed reporting required by the new ABA standards painted a much bleaker picture of the graduates’ experience. Just 167 of the 467 members of the class of 2011—about 36%—had permanent, full-time jobs where bar passage was required. Just 23—about 5%—had jobs with the biggest (and generally top–paying) law firms. ...

Employment Summary for 2011 Area Law School Graduates

School *Employed Total Graduates % Employed
GW 421 518 81.2%
Georgetown 403 644 62.5%
George Mason 102 170 60.0%
Howard 75 157 47.7%
Catholic 114 261 43.6%
American 167 467 35.7%
UDC 16 78 20.5%

*Includes only graduates employed in full–time, long–term positions where bar passage is required within nine months of graduation. (Source: Law school reports to the ABA Section of Legal Education and Admissions to the Bar)

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Comments

The problem with all these analyses is the obvious question: compared to what? Try getting a job in today's market without any credentials and law school will look quite a bit better.

Posted by: michael livingston | Mar 17, 2013 5:38:27 AM

Dear Michael,

The unemployment rate for college grads (~3%) is a fraction of the unemployment rate for new lawyers (~15%). The underemployment rates may be similar (both hover around 50%), but crucially, the average student loan debt for undergrads is about $27,000 while it is $125,000 for law school grads - NOT INCLUDING undergrad loans. And for the hundred thousandth time, having a JD does NOT help in any way, shape, or form when trying to get a nonlegal job. It is, in fact, a hindrance - a sign that you are argumentative, overqualified, expensive, and probably a jerk.

Sincerely,

Reality

Posted by: Unemployed Northeastern | Mar 17, 2013 10:44:49 AM

Over the last 20 years the in-state tuition at my public law school has quadrupled. Rank and file tenured faculty have received zero or de minimis salary hikes in that time span. The flood of new cash has gone to a new building, the dean and his henchmen, and pricey lateral hires. Bar passage rates for new grads have not improved appreciably.

As with the housing market until the crash 5 years ago, easy credit for law students has led to an asset bubble in legal education. Inevitably it will burst. Entrenched legal academics, like the former overseers of Fannie and Freddie, seem to be crowding onto the lifeboats. Law students, meanwhile, are trapped in steerage. Even those who can fight their way above deck will go down with the ship, helped along the way by the lead weight of student debt.

Posted by: Jake | Mar 17, 2013 12:12:26 PM

If I were a law professor, I'd be saying things like:

- "We can only offer a great legal education, we have very little control over how many of our students get hired."

- "As competent adults, all of our students made their own personal choice to attend this school."

- "We should presume that, as educated adults, our students were aware of what it meant to take out significant student loan debt."

- "Our institution has never represented that all of our graduates get their first choice of employment directly out of law school, or that the majority of our graduates find jobs in major law firms that pay over $100,000."

- "Nevertheless, each year some of our graduates are offered jobs in the top law firms in the country and top government jobs -- therefore many of our prospective students will have at least a shot of obtaining their dream by enrolling here."

- "Our tuition has increased at the same level as many comprable institutions over the past decade, and has been significant lower than some others. Still, we have committed to reducing costs in light of the difficulty many law student across the country have had in finding jobs."

I would absolutely not be making false, and entitled sounding comments like Prof. Livingston has made here.

Posted by: JM | Mar 17, 2013 12:13:22 PM

Unemp NEer -

Where do you get the 3 percent figure for college grads? is that number recent grads? That seems awfully low, if it uses the same methodology as the law grad figure you mentioned,

Posted by: Kipper | Mar 17, 2013 9:28:27 PM

Kipper,

Depending on the study (there are MANY these days), official unemployment for four-year degree recipients is between 3 and 5 percent. Of course, most of those surveys are funded by non-profit organizations set up by the for-profit lenders; entities like the Lumina Foundation and IHEP. They are, without a doubt, massaged to show a low number, because the explicit goal of these foundations is to greatly boost the number of college grads in the US, which *only* coincidentally would lead to a windfall for the same lenders that created those foundations in the first place. But no matter. The unemployment numbers are cooked for one and all. Really, only two things matter:

- Are there enough jobs?
- Do those jobs make the cost of the education worthwhile?

Under this rubric, the mere BA/BS holder fares much better than his or her counterparts with JDs, MBAs, MA/MS/PhDs, etc.

Posted by: Unemployed Northeastern | Mar 18, 2013 12:54:22 AM

The interesting thing about this is that GW was better than GTown at getting "real" jobs which require bar passage. Looking at the NALP and ABA data that they post on their respective sites, it looks like Georgetown was better at getting mid-sized to large firm jobs, but had a much larger percentage of unemployed and people who were working on gov't/public interest in "JD preferred" jobs. GULC historically has been a place for people working on the hill a few blocks away, and not all those policy positions require bar passage. GW seemed to have been much more focused on the whole class, even if they didn't land as many people in large firms. I wonder what the make-up of the unemployed was at G'town---were they transfer students, evening students, or just people who didn't have a direction and fell through the cracks at a big school?

Posted by: Berber | Mar 18, 2013 12:42:19 PM

"Long-term position" as used in the ABA stats above includes jobs funded by law schools that will end after as little as a year. Remember the brouhaha that followed GWs attempt last year to reduce the pay for these "jobs"?

Posted by: anon | Mar 18, 2013 8:45:26 PM

Unemployed Northeastern,

The unemployment rate for *recent* college graduates with liberal arts majors--i.e. the people who go to law school--is much higher than the unemployment rate for recent law school graduates.

You're comparing 40 year olds with degrees in engineering to 25 year olds with degrees in philosophy.

Posted by: Anon | Mar 25, 2013 11:31:57 AM