As faithful readers of this blog know, I am an attorney, and I have written several posts which may be read here, here and here, warning about some of the pitfalls of the profession, especially the financial cost of attending law school. The facts of law school debt as opposed to the job market have become so grim that even the American Bar Association has now issued a warning on the subject that may be read here. This is significant since the ABA has studiously ignored this problem for over a decade, even denying that there was a problem, and has passed out accreditation to new law schools with a glad hand. Well, better late than never.
Far too many law students expect that earning a law degree will solve their financial problems for life. In reality, however, attending law school can become a financial burden for law students who fail to consider carefully the financial implications of their decision.
You can underline and put several stars by that! The general public has the illusion that the law is a quick path to riches. Few things are farther from the truth. Except for the top 10% of the top law schools most new attorneys, if they can find employment, will be starting out at around 40-45k a year. When I graduated from law school in 1982 I started out at 16k. Earning 40k a year and having 100k in law school debts is a very bad situation, and decades of dealing with a huge debt, which cannot be discharged in bankruptcy except under the most extreme circumstances, await.
Obtaining a degree from an ABA-accredited law school is not cheap. Over the last twenty-five years, law school tuition has consistently risen two times as fast as inflation. Consequently, the average tuition at private law schools in 2008 was $34,298, while the average in-state tuition for public law schools was $16,836. When one adds books and living expenses to tuition, the average public law student borrows $71,436 for law school, while the average private school student borrows $91,506. Many students borrow far more than $100,000, and these numbers do not even include debt that students may still carry from their undergraduate years.
The numbers speak for themselves. I would never have taken on this type of debt to become an attorney, and if I had, I can’t imagine how I would have serviced that debt in my first lean decade as an attorney. There is more good news for people about to begin law school:
Consequently, most public law schools are raising tuition this year by 10-25%. At the same time, prospective students may have fewer resources from savings, family assistance, or other sources to help defray the cost, even as financial aid assistance declines. An average student considering enrolling in law school now should thus expect to graduate with debt well in excess of $100,000.
As these figures begin to sink in, and more new attorneys end up flipping burgers rather than writing briefs, I expect the law school education bubble to finally burst.
What many do not know, however, is that these costs often exceed the expected return on their investment in the job market. Prior to the recession, starting salaries for
associates at large law firms stabilized around $160,000 a year, and many prospective law students expect to be able to earn a comparable amount. In reality, however, only 23% of the graduates of the class of 2008 started with such a high salary, including only 37% of those who went into private practice. Shockingly, most of the rest of the graduates, about 42%, started with an annual salary of less than $65,000.
These figures are probably too rosy. Law schools often base their employment statistics and average salary on reports from newly graduated attorneys. Few attorneys want to report they are unemployed or earning 25k as a legal temp. Oh, and as to that $65,000 figure, there are plenty of attorneys out there who have been working for decades who would love to have had that as their annual salary last year. For grads this year more good news:
Recruitment at many levels of the job market is declining by similar amounts. Although numbers are not available yet, many members of the class of 2010 and 2011 may graduate without a job, and those who are lucky enough to find employment likely will collectively have lower salaries than their predecessors. In short, the job market is more challenging than it has been in many years, as well-paying jobs are in short supply.
Three years of often brain-numbing tedium, at huge cost, to join the unemployment line.
The combination of the rising cost of a legal education and the realities of the legal job market mean that going to law school may not pay off for a large number of law students.
Dean David Van Zandt of Northwestern Law School estimates that to make a positive return on the investment of going to law school, given the current costs, the average law student must earn an average annual salary of at least $65,315.
Now recall that I mentioned that there are plenty of attorneys out there who have been working in the law mines for decades, who would love to have earned 65k last year. The ABA ends its warning on a humorous note:
Many lawyers receive intrinsic benefits from a satisfying career that cannot easily be quantified.
Let’s try: difficult clients, arrogant judges, opposing counsel who are sharks in human form, twelve hour days, making payroll every week, enough paper work to choke Leviathan, etc. All in all, I have rather enjoyed my legal career, but at least half of the attorneys I encounter wish they were doing something else, and about a quarter of the attorneys I know really despise being an attorney. Anyone thinking of getting into the profession needs to think very long and hard before spending a 100k to enter a profession in which it is increasingly hard for many members of the bar to simply earn a living. As one judge I know summed it up: “The Law is a tough business.” You have been adequately warned!