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Wednesday, July 16, 2014

CNN: Go to Law School. Rack Up Debt. Make $62,000

CNN Money, Go to Law School. Rack Up Debt. Make $62,000:

CNNLeslie Thompson earns $40,000 a year working two jobs, but her Albuquerque, N.M., house almost went into foreclosure twice this year.

Thompson's trade? She's a lawyer.

Lawyers have been struggling for a while now, but it's gotten even worse: Half of lawyers are now starting at a salary of less than $62,000 a year, according to the National Association for Law Placement.

Not only that, but starting salaries have fallen 13% over the past six years, down from $72,000 in 2008. At the same time, lawyers' student debts are piling up. Thompson is carrying over $150,000 in student loans.

Thompson, the lawyer from Albuquerque, says she'll "keep scratching and clawing," but she's not sure how things will get better. "The situation is kind of grim," she says.

http://taxprof.typepad.com/taxprof_blog/2014/07/cnn-go-to-law-school-.html

Legal Education | Permalink

Comments

These articles are killing law schools. A lot of people won't believe something until they hear it from a major media outlet. And then they believe it religiously.

I am convinced that law faculty and administrators have no clue where the bottom of the decline is. These articles will continue to chip away at the cultural capital of law school, causing the enrollment population to converge with the number of people that can actually succeed in law school.

What is that number? Probably 15,000-20,000. There is your bottom folks.

Posted by: JM | Jul 16, 2014 1:13:03 PM

It really is as simple as the article's title...Glad to see it put in out there by a major outlet in simple lay terms. This must really get under the law school apologists' skin.

Posted by: Anon | Jul 16, 2014 3:58:40 PM

Lamentation over and over. Never a simple supply and demand reduction in the consumer *cost* of a lawyer?! That's why you have rendered yourselves ridiculous. More lawyers = CHEAPER.

Posted by: NikFromNYC | Jul 17, 2014 5:26:14 AM

Its more than that. This is chipping away at the very foundation of what is supposed to be the way schools provide education. I never saw a lawyer when I incorporated my business, did it all on line. Never saw a lawyer when I purchased a company, I outsourced it from another country. The advent of the Internet, the advent of low labor will be their downfall.

Posted by: rocinante3d | Jul 17, 2014 6:13:24 AM

Sadly, I wanted to be a lawyer since I was a kid. My law school represented to me when I made my decision to go that I'd be making $200k by this point in my career. I'm nowhere close. And unfortunately, because student loans can't be discharged in bankruptcy, the only people who are taking the hit for the downturn in the market and the glut of lawyers are those who went to law school and believed the representations made by the law schools that lawyers would be able to make a sufficient living to pay off that debt and have a decent lifestyle. As it stands now, in light of the way the business has completely changed and salaries have plummeted, going to law school has ruined my finances, most likely until I die - and in my mind, ruined my life as well. Who would have thought getting a higher education would be such a terrible idea. My advice to kids thinking about law school is simple- don't go unless you have a full ride scholarship or have significant family money that will pay for you to go.

Posted by: Matt | Jul 17, 2014 6:17:52 AM

I eagerly await some prof to write the follow-up "Go To Law School, Make $62,000/year More Than College Graduates, Because [To Be Determined Later]."

Posted by: Unemployed Northeastern | Jul 17, 2014 7:26:22 AM

I make $62,000 as a public librarian w/ 2 master's degrees, and I feel lucky - especially as nearly half of it vanishes in taxes in this state/county/city, and my husband lost his 25-year IT career in 2008. Things are tough all over.

Posted by: werewife | Jul 17, 2014 9:59:16 AM

This image is ridiculous. You don't weigh the value of your education by comparing the cost of the education over three years against one year of income (much less your first year). A better metric would be the difference in your income over your entire career compared to your non-law degree career against the cost of your law degree. Unfortunately, there is a vocal minority of law graduates who have failed to find law jobs that have taken their grievances to the blogosphere and now it's really affecting both legal education and the legal industry. The many law graduates who were happy with their choice to go to law school are generally too busy working to balance out the many haters. Unfortunately, prospective law students place a lot more weight on the blogosphere than they should, and it's severely affecting law school applications. I know 60,000 graduates a year is too many, but if law schools keep matriculating 10-15% less students each year for a few more years, there won't be enough graduates to even fill the lawyer jobs that are out there. Seems to me like a pretty good time to go to law school under the buy low/sell high mentality.

Posted by: John S. Treu | Jul 17, 2014 2:06:54 PM

John, are you saying that I have a more direct impact on law school applicants than, for instance, Prelaw Magazine, the S&M study, NALP, and US News? Awesome! I won't stop, then. If only the JD were actually a versatile degree, I could all of my higher education knowledge and go work for the Department of Education or New America or Gates or something.

I do applaud your irony in writing "buy low, sell high" to describe a product that has never been more expensive and is not transferable.

Posted by: Unemployed Northeastern | Jul 17, 2014 10:04:45 PM

Mr. Treu,
(1) An even better metric would be to compare the difference in income over an attorney's entire career less the cost of attendance with the income of someone with a comparable professional degree (say an MBA) over their career less the cost of that degree.

(2) The idea that only law graduates unhappy with their choice are participating the conversation on the legal blogosphere is simply false. I'm quite happy with my decision (I have a good job and, due to scholarships, very little debt). Yet, here I am, posting snarky comments on the internet in recognition of the fact that for many, many of my graduating cohort the decision was a bad one and they are in a very bad financial situation as a result. Come to think of it, I don't know a single person I graduated with, regardless of their personal outcome, who would agree that legal education isn't overpriced.

Posted by: Former Editor | Jul 18, 2014 6:08:34 AM

UN nailed it. I have posted before that I am lucky to have a good job, and that puts me in a position to know many other young attorneys. We all feel helplessly trapped by a crushing debt, and our future prospects are not all that great. The odds of ever transitioning to a big money track that would pay off my debt sooner are slim to none. So Treu, in my experience is dead-wrong. It is the voice of the employed and the unemployed that regret the decision to go to law school and take on this debt.

Posted by: Daniel | Jul 18, 2014 6:15:05 AM

The point that a law degree is not versatile is only half true. I’ve been happy to find that my education in law does well to complement my other backgrounds and competencies, and vice versa. On the other hand, a law school education will do little to singularly qualify someone for a wide range of jobs. Spending my undergrad years studying accounting and working as a programmer was what got me somewhere in the end. My patent attorney friends had similar experiences. What doesn’t work is getting a humanities degree and working as a teacher’s assistant and then trying to use law school as a means to pay off the debts with a high-flying, high-paying job at a big law firm. There’s a slim minority of people I know who can pull that off by getting stellar LSAT scores and great grades, but that no longer works for the rest of us.

The law is facing the same fundamental change that many other service industries have been facing for years: automation and outsourcing. Law firms can’t get away with charging $200 an hour for having a first-year associate draft or review a basic employment agreement to cover the firm’s massive overhead when you have things like LegalZoom or a talented Filipino attorney with impeccable English, either of which are much cheaper options. It’s obvious who loses here.

However, if you’re looking to blame someone for that, don’t blame the law schools – blame the Internet, or even just technology in general. After all, technology is what makes using LegalZoom or employing a Filipino attorney possible. Taking an overly cynical stance on how law schools are to blame for everything isn’t fair. The exorbitant costs of a legal education directly stems from the foolish premium the industry places on legal research, which leads to law schools paying for more professors who teach less and know less about the practice of law, but who happen to have clerked for whichever Supreme Court justice and who publish lots of research, etc. Obviously, higher salary costs mean higher tuition costs. Once again, it’s obvious who loses here.

I’ve been to enough conferences to know that many who care about this issue agree that new attorneys who want to make it today must have “cross-disciplinary” competencies that give them the ability to understand and work in an increasingly complex and technical legal world. Gone are the days where the law firms can afford to teach new associates everything they need to know about the actual practice of law. The quicker that law schools and law students alike recognize this and find new ways to make themselves valuable to the market, the better.

Posted by: Blake Treu | Jul 18, 2014 9:36:05 AM

Mr. Treu,

You make good points regarding the influence of technology on the legal market. It is certainly an overstatement to say that law schools are solely responsible for the poor legal market. That said, law schools are also not blameless.

Companies like LegalZoom (founded in 2001) and the presence of outsourcing in the legal sector (a big enough deal by 2008 to generate an ABA ethics opinion) are concerns that have been around for decade or more and their effects on the market were both predicable and actually predicted. Yet, many law schools refused (and some continue to refuse) to recognize this change in the market. Rather than decreasing their enrollments to mirror the changing market, during last decade law schools increased their enrollments (some continue to do so). The graduating class of 2013 was, for example, the largest one in history. At the same time, schools also continually raised tuition.

To put it another way, even though law schools did not create the changes in the legal market, their tuition and enrollment practices made the situation significantly worse for new graduates than it otherwise had to be by overproducing new lawyers, many with large educational debt, into a contracting market.

Posted by: Former Editor | Jul 20, 2014 11:34:16 AM

Former Editor:

You are correct that law schools have done nothing to help the situation by flooding the market with attorneys, but I still don’t think it’s fair to blame them for that. If enough people want to go to law school and are willing to pay for it, why wouldn’t the schools be willing to enroll them all? You can’t really expect any one raindrop to accept responsibility for the flood. If anyone is to blame, it’s the ABA – they have the necessary control over law schools, so if someone should have done something, it was them.

The only thing I would consider blame-worthy on the part of the law schools would be if they had been telling lies all along to students about what great jobs they would easily get if they would just go to law school, etc. I’m not saying that there are no schools that have done such things, but at least for my part, I didn’t feel like I was lied to when I graduated from law school three months ago.

In any event, the market is doing its own correcting, as indicated by the enrollment figures continuing to drop. The supply of attorneys will eventually decline to better match the demand, and hopefully (I know, just hopefully) things will work out for young attorneys like me in the end.

Posted by: Blake Treu | Jul 21, 2014 8:45:03 PM