A number of friends have been writing to me to ask what I think of the article in today’s NYT, Is Law School a Losing Game?, by David Segal.
Much of what I think can be found in last month’s blog post, Do Our Graduates Have Jobs? What Are They Making?, but here are a couple of additional thoughts prompted by the article.
Overall, there is a lot of truth in this article, but also some cherry-picking. In other words the article accurately shows how bad it can be in some cases, but not how bad it is for the average graduate (which can be tough these days, but not as bad as the examples in the article). The student who is the main example seems unusual in three ways: 1) He borrowed to the max, and not just for law school. 2) He went to Thomas Jefferson Law School, which is categeorized by US News as a Tier 4 law school — the lowest tier they’ve got. So, fairly or not, the diploma has less market value than most. We’re not told what his class rank was, either. 3) The guy seems somewhat irresponsible and disorganized: He picked TJL without doing any research: “Michael Wallerstein knew little about the Thomas Jefferson School of Law, other than that it was in San Diego, which seemed like a fine place to spend three years.” At another point in the article he’s quoted as saying, “I’m not really good at keeping records.” Honestly, would you want someone like that as your lawyer?
There is another way in which Wallerstein might be a bit more representative, though: “When Mr. Wallerstein started at Thomas Jefferson, he was in no mood for austerity.” He spent too much loan money on living expenses instead of trying to live cheap. There’s still a lot of that around.
The underlying economics for law students borrowing all the way up to the max does indeed look bad if they are not in a top-20-or-so law school unless they end up in the top 20% or so of their class, have connections, or a special skill (e.g. science for patent law). Most others need to be frugal, and also to decide whether they are in it just for the money. If a career in law promises no psychic returns — ie fun or fulfillment — then if you are going to even a mid-tier school and doing it all on borrowed money, it makes sense to question how sure you are that you can do well enough to make it a good financial investment.
If, as the NYT article suggests, more representative students will need to earn $65K per year to pay off their debt, that figure is in fact attainable for a chunk of graduates from Tier 1 (top 100) law schools, but exactly how many is hard to say and it is quite clearly not attainable for all of them. At least at UM (currently ranked only 60th by US News, and ranked lower (71st) in 2009), in the most recent reporting period of the people willing to disclose their salaries in the 2009 class almost three quarters of the total and almost of all those in private practice were making that or more as a starting salary. But those numbers come with two very large caveats: First, the reporting rate was low — although we know that about 90% of the graduates were employed, only a third would disclose their salaries. So the real earnings numbers are likely lower. Second, given the economy, there is reason to fear that the next year’s figures will be worse. Even at the 2009 rates, the problems are that 1) too many expect to make $120-160K, a starting salary which in fact under a third — likely well under a third, conceivably as little as 9% — of our students make after immediately after graduation (see the pie charts in Do Our Graduates Have Jobs? What Are They Making?, and remember that only 68% of the graduates work in private practice, and only 33% of all graduates provided salary information, so discount accordingly), 2) a growing slice of the law grads in the US (something on the order of 10% at UM in 2009) can’t find legal jobs at all, 3) public interest work and government work almost always pays less than that $65K starting salary level. (Recall, though, that not everyone has the same debt overhang, so some of the others in the lower-paying public or non-profit sector may have self-selected because they can afford it, or may see the jobs as good ways to gain experience before going private.)
Bottom line: Almost everyone coming in used to think the big bucks were within reach. The facts tell a different story.