I don’t know if this is an eight-year thing, like some sort of intellectual cicada, but we’ve been here before. Back in 2013, major newspapers published a bunch of articles purporting to show that a J.D. was a bad investment financially. This led to a purported (and in my view slightly over-done) rebuttal, The Economic Value of a Law Degree, by Michael Simkovic and Frank McIntyre; Simkovic in particular then took to the blogs to defend his corner.
Now, we’re back to it again: today the Wall Street Journal published Law School Loses Luster as Debts Mount and Salaries Stagnate, which generalizes from undoubtedley true tales of people who borrowed too much ($300,000 in some cases, a chunk being undergraduate debt), and were not able to find jobs after law school that allowed them to pay it back in a reasonable time, or at all.
And, like clockwork, here’s Michael Simkovic with a reply, Wall Street Journal blames law schools for COVID economy (Michael Simkovic), the core of which is the economist’s perennial question: compared to what? Simkovic basically argues that, yes, more recent law school grads have had it tough, but less tough than people who didn’t get law degrees.
In fact, the story last time was more complicated than it appeared from the newspapers. And yes, law school tuition is too damn high, but that’s the rack rate and law schools discounted a lot back then and do even more of it now. More generally, at least eight years ago, whether a J.D. was worth it turned out to be much more complex issue than journalists seem to be willing to accept.
I wrote a bunch of blog posts trying to sort through the mess then, and I think they’re still relevant now. A key conclusion was that for law graduates who paid full freight and ended up in the bottom quartile of the law-graduate income distribution [NB: that is not the same as being in the bottom quarter of the class in a given school–this is a national earnings number, and one I suspect skews hard towards grads from bottom-feeding law schools] law school might be a bad financial investment. Another point was the obvious one, that when you start law school it’s pretty hard to know if you will be one of those people, and some of the folks who borrow a ton might be the very people with an inflated estimate of their prospects and abilities.
Here are some links to my posts in the first round:
- Study Finds the Net Present Value of a Law Degree is Highly Positive (July 17, 2013)
- Fur Flies in Debate over ‘The Economic Value of a Law Degree’ (July 25, 2013)
- You Can Drown In a River That Is An Average of Six Inches Deep (Part 1) (July 27, 2013)
- You Can Drown In a River That Is An Average of Six Inches Deep (Part 2) (July 28, 2013)
In his latest, Simkovic notes two key facts that he says undermine the WSJ article’s analysis. First, during the COVID recession, there has been a program of national forbearance on loan repayment. Second,
During this period, law graduates and other highly educated workers have faired relatively well, at least judging from the imperfect data that is currently available (see also here and here). Lawyers continue to earn high salaries, their employment numbers have not appreciably declined, and unemployment rates in legal occupations, at 3 percent, are lower than in most fields.
At first glance, this seems plausible. But it does not change three facts. First, there were and are a group of people who borrow a lot, especially those with substantial debt from college. A subset of that group do not get the high-paying jobs they were counting on after law school (and an even smaller subset can’t find legal work at all) and find themselves in various forms of financial difficulties ranging from not making payments to a long-term debt overhang that limits future choices in life. Second, these sub-groups are a small minority of law graduates, although the number for whom a J.D. does not turn out to be profitable could be up to a quarter of all graduates, depending on various assumptions. Third, current law school practices do not protect this group from what you might call the risk of buyer’s remorse–of course, that sort of protection against one’s own life choices is generally rare.
It’s possible to imagine some partial solutions. For example, I’d like to see educational debt more easily discharged in bankruptcy; right now discharge is much too hard.
And, there might be things law schools could do on their own too, but they are not cheap. For example, wouldn’t it be cool if some law school offered students the option of a substantial refund–say 50%?–to students who (1) had a high debt load and (2) did very poorly in their first semester or maybe their first year and (3) decided to drop out after they got their grades. It’s true that we don’t know that low grades mean low salaries–indeed there are many anecdotes of people doing badly in law school and then making a mint as a trial lawyer or an entrepreneur–but that has to be a higher-risk strategy for a student. Who knows, maybe the law school could ask for a small surcharge in exchange for this form of insurance. But I dream.
I am going to save a future lawyer the hassle of paying for a legal degree.
The law depends on nothing more than convincing others you are right.
Leaving aside how silly this is on its own terms, if what you think is that law practice is only about disputes, then either you have forgotten a lot since you graduated or we failed you pretty badly.
So much of law practice is transactional, regulatory, and planning related, not just courts, meditations, and arbitration.
I was just trying to lighten the mood.
People should read ‘Con Law’ and “Don’t Go to Law School (Unless)”
Right now the odds of starting off with the sort of job which could economically justify the cost of a JD are far too low, except at the T13.
This depends on what you mean by “economically justifies”.
The (plausible) claim from Simkovic et al is that on a lifetime employment basis, the present discounted value of the net gain from a law degree relative to stopping with a B.A. [i.e. we’re not comparing to other advanced degrees] is positive for a large majority of law graduates nationally. I make it 75% nationally (i.e. numbers in your law school could vary a lot from this) with very pessimistic assumptions; the real number is likely better although probably not quite as great as Simkovics claims.
BUT – that does not address cash flow issues, which could be very real starting out. For our place for example, only a minority of the class — well less than a quarter I’d guess — gets a super-high-paying starting job in a law firm.
For others, I suggest reading these books.
And looking at the Law School Transparency Project
The short answer to Michael is that the overwhelming majority of law school grads do not start off in the sort of job which offers a chance of repaying $150 – $300K in student loans.
The sort of jobs which offer that chance hire from only a few schools, and get rid of the associates after 6 years.
“Is Law School Worth the Cost?”, Brian Tamanaha: https://jle.aals.org/cgi/viewcontent.cgi?article=1061&context=home
Also, from ‘Lawyers, Guns and Money’, this gem: https://www.lawyersgunsmoneyblog.com/2021/08/inside-the-law-school-scam-redux
This is a topic worth more than these short few sentences. However, in order to keep up with work and make sure that my law degree continues to be (just barely) worth the expense, I will cut to the chase and propose two general solutions:
1) reform the bankruptcy code to make discharge of student loans the same as discharge of retail debt, but only after some sort of cooling off period – maybe 5 years after the conclusion of full time studies. This avoids potential abuse by young borrowers who know they have a lifetime ahead of them and therefore might just file for bankruptcy the day after receiving a license to practice. Also, after 5-ish years, most of us have our general track as lawyers figured out (and if you haven’t, it’s figured out and you just don’t see it yet – it’s probably a mess, sorry).
2) Eliminate bottom tier law schools. I know that those schools provide opportunity to many who might not otherwise have had a chance. And so this one is dangerous. But there are just too many lawyers competing for too little good work. A couple of years ago, maybe 2018, St. Thomas School of Law (for those out of towners, that is a local law school in Miami) posted statistics that showed that only about 50% of their grads were finding work as lawyers withing 12 months of graduation (I went looking for that stat to link to it here, but could not quickly find it.). What portion of that 50% was making the sort of money that might justify a $200k+ opportunity cost? (Between the actual tuition and the lost income from 3 years of unemployment during studies, $200k is a conservative cost.). Most of those grads would have been far better off becoming firefighters or nurses.
In addition, from the Business Insider (https://www.businessinsider.com/the-economic-value-of-a-law-degree-criticism-2013-8), “Here’s Everything That’s Wrong With That Study Calling Law School A Fabulous Investment”
As someone who graduated UM Law in 2010 and never found a legal job, I can only say that the entire venture was, unfortunately, a waste of time.
Now, I graduated in the top 20% of the class that year, but at the time nothing like that mattered; the only way you were getting a job in the legal world was if you had a relative who was also a lawyer and was willing to have you come work with them, or if you were somehow able to hang your own shingle, which was obviously a huge risk that could only be taken on by graduates whose parents had paid their freight or those who had full ride scholarships and no debt.
When those of us who became the lost class of 2010 took the LSAT and applied to schools in 2006 for the 2007 academic year, the economic outlook was rosy. The law school proposition, though expensive, seemed rational. It was possible to go to a decent school, do well in class, and then get a high-paying job that would help you plow through the debt in a few years.
That all changed when the rug was pulled out from underneath us (and the rest of the world) almost exactly halfway through our 3-year adventure. I remember sitting on The Bricks at night with classmates pondering whether we should drop out. A few did, but most of us had too much of something, maybe pride, maybe stubbornness, maybe delusion, and we stayed and finished. This despite knowing that a ton of us knew we had just watched our dreams and futures evaporate along with so many people’s retirement accounts.
Remember, it was so bad back then that UM and other schools started up job programs, like HOPE Fellowships at UM, to try to do two things: get students into jobs that at least paid something and to juice the schools’ plummeting employment statistics for the US News rankings. The conversations coming from career centers back then were grim — there were stories of the T13 career folks calling the whiteshoe firms and begging them to give their students summer associate jobs – unpaid. When we UM students heard that, we knew were were screwed.
I’ve mostly disconnected from the legal field in the ensuing years, mostly because it’s depressing to look back and think about what could have been had the world not fallen apart.
But then and now, the thing that strikes me about law school is the cost. Compared to medical schools, law schools have paltry expenses. Faculty salaries, law library, Lexis/Westlaw subscriptions, etc. That’s nothing compared to the expenses needed to run a medical school. Yet law school tuition is only marginally lower than medical school tuition: https://www.businessinsider.com/debt-vs-cost-vs-salary-medical-dental-law-school-2018-5
This makes law school seem like at least a partial scam. Law schools are cash cows for universities; little overhead coupled with massive revenue. It’s the reason why they’ve proliferated over the last 25 years or so. It’s the reason why there are so many awful Tier 4 Toilets churning out graduates into a job market that doesn’t need more lawyers.
Anyway, you can probably tell that this issue has come to define my life, as I sit here with a debt burden that will never be paid off and will forever prevent me from being bold in making career moves or betting on myself in any way. Now back to the cubicle to complete a job task that in no way requires a legal education. Ugh.
Two minor points, neither of which goes to the main, and depressing, points of your comment::
That’s definitely a good point about medical schools getting research grants from the government. I hadn’t thought about that.
I would say in response (not rebuttal) that the government’s issuance of grants to medical schools is evidence that medical schools provide value to society at large through their research, while law schools don’t receive such grants because there is really not much public good that comes from legal research.
I think that’s not why it happened. Rather, the pattern got set at a time when medical schools couldn’t support themselves, and law schools–having much lower costs–could, indeed with enough left over to be skimmed off by universities.
On the more general point of value, I hew to the quaint idea that making democracy work, settling disputes, and greasing the wheels of the economic system are things of high value. They may not be as showy as cures, but once they are absent (think Jan 6 for example), we sure miss them.
Those are both good points and hard to disagree with. Instead I might draw a distinction between two types of legal research: the practical and the academic. At the end of they day the two feed into each other, but the distinction still might be worth exploring.
The practice of law (and the research required to practice effectively) makes democracy work and lubes the economic system, etc.
Academic legal research, on the other hand seems a little bit like stamp collecting: very few people do it, even fewer people pay attention to it. And I say that as someone who, if I could live life over again, would have probably pursued a career in the academy (although not in the law, more likely in anthropology or archaeology).
When a stamp collector discovers a rare stamp that was hidden away for decades, the tiny collecting community gets excited, but outside the community the discovery doesn’t register.
Similarly, legal academics (apologies for generalizing, just know I don’t at all mean to say all legal academics) seem to get excited about various arcane details in their area of interest, write about them, speak about them, devote large chunks of their careers to them, only to realize that their favorite exciting detail plays only a small role in the lives of everyday people, or even no role at all.
And again, if I could relive life, I would try to become a member of the academy and could very well have found my own arcane details to love. None of this is meant as a criticism of the academy; I love it and never felt as at home anywhere as on a university campus.
January 6th… oh boy. It’s still hard to see that footage and realize it happened, in the United States, in the 21st century. What a disaster.
The stuff about what legal academics do is a common trope. It’s certainly not totally untrue — it’s a big academy, so you can find examples of everything — but it I think it’s not representative of most of what is published in law reviews.
I can’t pretend to have surveyed it all, but you could look at the table of contents of a few random law reviews for a year’s volume, and I think you’d be surprised.
Or, you could look at my work. I think almost all of it (not necessary all of it, but most of it) has a practical connection and a possible practical payoff.
Take, for example, the article draft I just blogged about the other day. Although there may be a couple of fanciful bits here and there, on balance it’s pretty much a realistic appraisal of how we might might make the Senate more small-d democratic–and how hard that will be.
“On the more general point of value, I hew to the quaint idea that making democracy work, settling disputes, and greasing the wheels of the economic system are things of high value. They may not be as showy as cures, but once they are absent (think Jan 6 for example), we sure miss them.”
Michael, you are now appealing to some more ethereal ideal (which I strongly support), but these schools charge $200-$300K for that.
Also, this is no longer supporting the thesis of the $1million law school benefit.
Indeed, there has been topic drift. My comment was a response to the suggestion by CRV that the government’s failure to subsidize legal education with grants was a sign that it had low value, not in response to the original topic of the post.
In any case, the values I was describing are largely externalities to society, not values to the lawyer, so we would not, in the main, expect law students to be the ones to pay for them. (Although in some cases we might expect clients to pay lawyers for them.)
It’s perhaps notable however, that a legal education in a state law school used to be quite reasonably priced, and thus I suspect in effect substantially subsidized by the taxpayer. That’s not the case today. I don’t think this is because law is suddenly less valuable to society.
Au contraire, legal research defines the notion of value to society a priori.