Quantcast
Don't Miss
Home / MinnLawyer Blog / Is a JD becoming a 'bad gamble?'

Is a JD becoming a 'bad gamble?'

We have had a lively discussion on our post about the Big Law pricing models (i.e. continue to charge high billable rates at a tidiceme where there is not enough business and folks are getting laid off). It sounds counter-intuitive, but there are actually some rational reasons for doing that (e.g. the danger of compromising the perceived quality of the services you offer). We also had a number of comments on our post about the layoffs at East Coast megafirm White & Case and the potential implications for Big Law.

A thread started in the comments to the latter post that I found of interest — the current value (or lack there of) of a legal education. The following is a posting from a commenter who uses the nom de plume “ex-RB”:

… I’m bitter because so many of my classmates – the ones who were in my study groups, the ones whom I spent countless hours with on moot court and law review, the ones who had a good time at bar review with me (but not as good of a time as me) – all bought into the severely overpriced institution of law school and were unable to land anything paying more than a quarter of what I made…all because their GPAs were two-tenths lower than mine.

I’m sure you’ve all seen the bi-modal distribution of law grad salaries. For every grad like me who IS afforded a BigLaw offer, there are four or more stuck on the other end of the spectrum. And while I’m happy for those like you who were able to hang their own shingle, there are many others without any business acumen whatsoever who would and do flounder and pack up shop after a short while.

To me, law school is nothing short of a bad gamble. There are some winners who strike it big, others who work their tails off to be able to say that it was worth their while, but many more who just end up with a lot of resentment at their decision and a hefty student loan bill each month.

With debtloads reaching six-figures for many students at a time when the always limited opportunities for high-paying Big Law jobs are shrinking, has a JD become, in effect, “a bad gamble?”

18 comments

  1. Just about every big firm, and most little ones too, in Minnesota has a “must be in the top 25%” rule for adding new associates. Sure, there might be an exception if you are the winner of a Nobel Peace Prize or the child of a name partner, but for the most part that’s the deal. That means 75% of the class is out of luck, at least in terms of getting the job they thought they were going to get when they started law school.

  2. A friend is accepted to a top 3 law school. Going to law school, busting his ass off to get excellent grades, getting a job with big law–all this will result in a salary 1/3 of what he makes now in health care. Associates used to start excited about 165,000/yr not realizing the hourly expectation meant they were making less than a contract attorney doing document review.

    I think there are benefits to a law degree for those who are smart, shrewd, and connected (or a variation). But can I, in good conscience, recommend law school even at an elite school?

  3. I am a returning student who completed a law degree at a local school in 2007. I have found most of my classmates are paid in the $40K to $60K range. As a former business owner, when I bought equipment I expected a 20 percent ROI or forget it.

    To make a return on such a law investment, I better be making $20K annually above my investment, or about $35K per year beyond what i could make with a straight BA. I currently work with many BA’s making in the $40Ks, so unless a law degree can “accelerate” your career earnings quickly, I fear the answer is a simple “no.”

    A law degree has become like a roulette play. One in 6 will “win” the rest destroy their financial futures.

    Inevitably someone will argue with my numbers above, but look at the big picture. It’s telling that we don’t hear these discussions about engineering, CPA’s and doctors.

  4. The key is for prospective law students to fully understand what they’re getting into before signing on the dotted line.

    If you’re not certain you’d like to be a lawyer, law school only seems like it might be “interesting,” and you don’t have test scores that grant admission to one of the Top 14 law schools, then it may not be a good idea. These students are the ones who generally burn out from the law school curriculum because for the most part, learning the law is frighteningly tedious. That burn-out is reflected in grades and affects job prospects accordingly. On the other hand, if you do gain admission into a truly first-rate law school, then it may not matter as much. You could probably write your own ticket.

    And a warning for those attending third or fourth-tier law schools: you absolutely cannot allow yourself to graduate at the bottom of your class (perhaps even the bottom half). Those poor souls are generally the ones who paid full price for their legal education and have no real job prospects. $120,000+ of educational debt and a meager or non-existent income is the worst possible combination.

    All this isn’t to say that those working at Big Law in Minneapolis have it made. If you hope to advance in the firm and become an equity partner, be prepared to give your life away. It’s that simple. I know of few lawyers so efficient that they can legitimately bill eight or nine hours per day without spending twelve, thirteen, or fourteen hours at the office.

    I guess what I’m trying to say is that you should be sure about becoming a lawyer before you jump in. It’s not an easy life.

  5. At the risk of seeming too paternalistic, I would suggest that the law schools, all four of them, might have some positive obligation to prospective students to explain the job market, especially the debt-at-graduation to salary prospects. For neo-free marketers, or libertarian caveat emptorians, I guess the answer is “Well, shouldn’t they do it themselves?” My response to that is sure, but I think that law schools need to recognize the reality of the misconceptions of some of our prospective students and attempt to clarify the reality. Failure to do so is taking advantage of our “consumers” and cynically taking their money (or their loan proceeds).

  6. There’s nothing rational about the pricing model. Your customers don’t care about your costs. Seriously, would you pay more for a ball bearing only because it happened to be made at night and it’s more expensive to make things on the night shift. That it, in essence how cost plus pricing.

    And don’t look to pharma for justification, the prices aren’t based on recouping R&D. They’re based on how their offering compares to the next best alternative as per the insurance companies’ calculation . No actuary would approve a drug that was priced any other way.

    Look, the bottom line is that law school is no longer a profitable decision. Don’t burden the rest of the economy with with your personal ambitions.

  7. I am not going to hide behind “anonymous”. If you want to discuss this further, please feel free to contact me at http://www.IAJLaw.com.

    I graduated from the Harvard of the Midwest in 2006. Unfortunately, I had to subsidize my education with student loans. I do not make $165,000 or even $65,000. But, having the education and unlimited potential was worth every penny.

    Betting on the one in six principle is ridiculous. If I was able to help one person, my family included, it would have been worth every dime and hour spent in library.

    Who is sure about anything these days? Job layoffs and an dissatisfaction for one’s job or career is a normal feeling. But, taking a leap of faith should resolve those issues.

    If asked by a potential law student whether or not it was “worth it”…respond by stating never give up on yourself because anything is possible.

  8. Jasper, I admire your tenacity and optimism, but since when is Hamline the “Harvard of the Midwest”?

    Let’s tone down the rhetoric on that one.

  9. Meee-ow Anonymous 9:40!

    Also, I’m with Jasper on this one. I’ve been waiting for someone to chime in from the middle ground for a while. I am working, thankfully, and will be for a little while after the bar exam in July. After that, who knows? I’m saddled with debt up to my ears … and it was worth every penny.

    It saddens me to hear things like, “for the most part, learning the law is frighteningly tedious,” from Anonymous 12:38. I’m not saying it’s a walk in the park, but it is pretty damn great.

    I guess what I’m saying is that your attitude shapes your thoughts about the gamble, and what winning really means. In my book, that does not include “Big Law,” working 80+ hours a week, or measuring the value of my experiences by the amount of money I earn.

    Love,
    Pollyanna

  10. “Pollyanna” has touched on a pretty important point here. Whether or not you view a JD as a “bad gamble” has a lot to do with what you expect the payoff to be.

  11. I think a lot of people expect the payoff to be higher earning potential. I’d be pretty angry if I found out that I spent three/four years and tons of extra money to make as much as I could’ve done in a different field with just an undergraduate degree. I mean, what’s the point then?

  12. My answer to the question posed by Mark: yes

  13. A lot of people do enroll in law school to increase their earning potential over a BA. Others want to do something socially meaningful that may not increase earning potential (e.g. Legal Aid, Public Defense, other public-sector work). Still others may just think they mighte like to do what lawyers do. (For many, it’s a combination of these.) Sadly, the current recession has hit the interests of all these groups — with cuts in both the public and private sector.

    Potential law students looking for the maximum economic return should probably start their own hedge fund with their tuition … On the other hand, if being a lawyer is really what you want to do for the next 40-50 years, it’s hard to say you shouldn’t pursue that dream just because you may have been able to find a job that yields more $ and requires less education.

    The other major issue is that the major barrier to entry in the profession (i.e. the amount of loan debt many students incur) is currently disproportionately high to economic rewards available to many of them. Even some of the “winners” who land the increasingly scarce Big Firm jobs may not really be “winners” if they don’t really want to be there working the hours, but have to because of loan debt.

    I suppose the key is to go on with eyes wide open, which is where I think that the current system often breaks down.

  14. Is it a gamble? Yes. I do not recommend it to anyone anymore and I try to talk prospects out of it unless they are willing to complete a dual degree. I am living the resentment of having sacrificed so much precious time, being saddled with debt and earning only slightly more than I did as a law clerk (not to mention the great hours and benefits of clerking and none of the stress). I would never want the big firm lifestyle, but what I have to offer is worth more than the return I am receiving from my investment.

  15. I am also a bit resentful that I am saddled with high loan debt with no opportunity to work at my choice of law practi. However, I will never resent the fact that I have a law degree, a law license, and am able to participate in what having a law degree is REALLY suppose to be about: working a Profession.

    “. . . a calling requiring specialized knowledge and often long and intensive preparation including instruction in skills and methods as well as in the scientific, historical, or scholarly principles underlying such skills and methods, maintaining by force of organization or concerted opinion high standards of achievement and conduct, and committing its members to continued study and to a kind of work which has for its prime purpose the rendering of a public service . . . ”

    http://www.annals.org/cgi/content/abstract/85/5/675

    Since the true professions only include divinity, medicine, and law, we attorneys are in a very small group of people dedicated to provide service to those in need of our higher knowledge in the field. Our responsibilities rest on integrity, service, and assisting others in receiving justice and do not focus on whether our pay equals those who operate wall street hedge funds or CEOs that make decisions on the basis of risk and gain for the benefit of paying dividends to its shareholders with no consideration for that decision’s greater effect.

    Only those who hold a law degree and license may walk the walk of a legal professional. If someone wants to enter the legal profession, they are choosing to walk, talk, and act as our profession requires, overseen by other attorneys, for the greater good of human-kind. It is time that self-actualization is not measured by money and objects, but on self growth and life participation.

    It is the greed of the lenders who seek to make profits off those who seek a legal education and also the fault of the law schools who charge ridiculously high tuition (400% increase since the 90s) that should be admonished for not properly preparing its students for what the profession is really about.

    “self-actualizing people see life clearly. They are less emotional and more objective, less likely to allow hopes, fears, or ego defenses to distort their observations. Maslow found that all self-actualizing people are dedicated to a vocation or a cause. Two requirements for growth are commitment to something greater than oneself and success at one’s chosen tasks. Major characteristics of self-actualizing people include creativity, spontaneity, courage, and hard work.”

    http://www.abraham-maslow.com/m_motivation/Hierarchy_of_Needs.asp

    It is my opinion that if a law student is not seeking the true profession of law by attending law school, perhaps attending a business school and receiving an MBA is their better choice.

  16. Hi there,

    I recently earned my Bachelors degree in Sociology…yup. I’ve got a funny feeling that Environmental Law degrees and/or Energy Law and Entrepreneurship are going to be profitable markets considering the bell shape of technological advancements in biological/chemical/nanotech/solar and whatever else that can potentially finally deliver Nikola Tesla’s dream of massive energy numbers to all people on the planet. Do any of you see where I’m going with this thread and the true value of getting one’s foot in the door of an important corporation concerned with energy regulation (taxation?) and/or environmental conservation resouce acquisition laws? Really vague. Hopefully one of you smart ones can toss us a nickle and stop bickering on the gamble.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

 

Scroll To Top