Saturday , 19 August 2017

Law School Attendance: Do Your Research!

Law School AttendanceSo you’re thinking about law school. Unsatisfied with your current circumstances or perhaps simply chasing a childhood dream, law school has popped onto your radar. You find little fault with the option and even find yourself pretty excited at the prospect of graduating with a law degree. After all, being a lawyer is quite prestigious. The profession is right up there with the doctors and the bankers. That type of potential lifetime cachet is hard to resist. Let’s also not forget the money. Really, how often do you see broke lawyers? The profession may not be as glamorous as Suits portrays it, but it sounds pretty fancy. Then again, if you graduate and you don’t want to be a lawyer there will be plenty of other options. The JD degree will provide a prized competitive edge over your peers, unlocking doors a college degree simply cannot. What exactly could go wrong? Without being a debbie downer, plenty. In today’s economy, law school is rarely a ticket to an upper-middle class lifestyle. The decision to enroll in any particular law school should come only after extensive research and an understanding of the current legal market. Here are three fundamental characteristics that every prospective law student should keep in mind:

1. Law School Employment Statistics

According to The National Association for Law Placement (NALP), a little more than half of the nation’s 2015 law school graduates found a job in private practice. Yes, you read that correctly. To quote NALP:

“Just over 51% of employed graduates obtained a job in private practice, a figure that has fluctuated only between 50.7% and 51.3% since 2012. Though well above the trough of 2011 when the measured rate was only 49.5%, these figures are nonetheless below the prevailing levels of 55-64% of jobs for the 25 years prior to 2010.”

Although this statistic refers to private practice only, private practice is the meat and potatoes of the legal field. Opportunities in private practice make up the vast majority of available entry-level positions in the legal market each year. But, you may ask, can’t law graduates work for the government or do public interest if a job at a law firm can’t be obtained? It cannot possibly be the case that only half of law graduates find employment after graduation. You’re right, some law graduates do wind up obtaining government or public interest positions. The problem is that these law graduates are a small minority. So small, in fact, that they shouldn’t be considered an alternative like was perhaps the case a few decades ago. Indeed, according to NALP’s statistics, only 66.6% of 2015 law graduates obtained a job for which bar passage was required. That’s an increase of a little over 15% over the private practice total. What about the remaining 33%+? Who knows. The worst part about these statistics is that they only factor in the law graduates that actually responded to the survey after graduation. Although an optimist might conclude that’s a positive fact because this might not account for all the law graduates that were able to obtain post-graduate legal employment, think about this for a second. Do you think the law graduates that have obtained legal employment after graduation or the law graduates that have not obtained such employment are more likely to make this fact known? At best, these statistics can be taken at face value. At worst, they’re skewed in favor of successful law graduates with the motivation to share their success by responding. Either way, these are some sobering statistics. After 7 years of higher education, as much as 4 out of every 10 law school graduates across the entire nation graduate empty-handed. That’s a success rate that is a little too close to a 50/50 roll of the dice, especially when the jobs that are being reported by law schools as full-time legal jobs within that 66% figure have included jobs that do not actually fit that criteria. Common examples include temporary positions such as doc review that graduates happen to hold at the time the surveys are completed, non-salaried volunteer work in state government, or jobs temporarily provided for graduates by their own law schools for a period of time after graduation.

To make things worse, the Department of Labor forecasts the legal field’s growth from 2014-2024 will trend at average speed and provide for about 44,000 job openings. This means, on average, there will be around 4,400 additional jobs opening every year up until 2024. Even if no current legal jobs are cut back over this entire time period, imagine the saturation present in the legal field when the size of the graduating Class of 2015 was around 40,000. After several years of extensive overproduction of law graduates, the cherry on top to consider is that each year law graduates are not only competing for legal positions with their class peers, but with all those law graduates from previous years who have not yet found legal employment. These law graduates do not just disappear.

Finally, NALP points out that the amount of jobs found by Class of 2015 law graduates actually decreased in comparison to the Class of 2014. However, since the 2015 graduating class was smaller than the 2014 class, the employment rate stayed consistent. That’s not exactly comforting news:

“Moreover, the number of jobs found by graduates was down by more than 3,000 compared with 2014. However, since the number of graduates was also down according to the ABA, the employment rate remained steady even as the number of jobs declined.”

2. Law School Rankings

US News publishes a law school rankings list of the Top 100 or so law schools in the country. Law schools have obsessed over these rankings ever since the rankings came into existence, but that’s because prospective law students place so much weight on them as well. Unfounded weight. What you don’t know about these rankings is that they have very little to do with a law school’s worth because they factor in a multitude of things nobody cares about and ignore factors at the heart of a decision to enroll. Some of these pointless factors include how the faculty “rate” a school’s strength in a particular area of the law (yes, let’s ask the people whose paycheck relies on the law school market’s continued success how they feel about its features), expenditures per student, and acceptance rate (which surely can’t be rigged by providing waivers to students who have no shot of being accepted but can apply just to get rejected). Regardless of the weight some of these factors may be awarded, none of them matters. What matters is whether you can get a job after 3 years of sitting through law school. The obsession with rankings is understandable. It’s not unreasonable to assume the average student does not decide to enroll in any given school out of pure enjoyment but because he or she is looking to begin a particular career track. To establish a path that is least resistant to success, it becomes natural to try and rank schools and enroll in the highest ranked school to which the student is accepted. After all, the higher the school’s ranking, the better are the prospects, right?

For purposes of law school, US News is largely meaningless outside of indicating what law schools occupy the very top. There is a recognized “Top 14″ list of law schools that stands tall above all others, but outside of that category, US News creates more danger than opportunity. Relying heavily on US News rankings may fool you into a trap that may very well lead to a very undesirable result. For example, looking at the US News rankings and determining that it’s better to go to a law school ranked in the 40s over a law school ranked in the 80s because of the mere fact that one is ranked in the 40s is pure ignorance. The discrepancy in legal employment opportunities between the Top 14 and any school outside of this category is so severe that all that is necessary to evaluate the decision to go to law school is generally the following:

1. Will I be in severe debt due to my attendance? (more than 50-60K)

2. Will I have a guaranteed job upon graduation? (unless you can answer this question with a yes, refer to question 1)

Remember, unless you are the rare and special unicorn that decides to enroll in law school out of pure boredom or as a way to enhance an already established career in another field, your ultimate goal is presumably to be employed in the legal field after graduation. Rankings of law schools do not matter, your chance of employment after graduating from law school is all that matters. For this, you need employment statistics, real employment statistics (not the ones on a school’s website). For the closest gem available, visit Law School Transparency. US News is not your answer.

3. Law Salaries and Debt After Law School

A. Salaries

Imagine you’re getting ready to apply to school to enter a specific field and most of the schools you visit proclaim in their brochures that the most common outcome for the school’s graduates is a six-figure salary upon graduation. If you’re told nothing else, there’s a good chance you’ll excitedly launch some applications with the hope of enrolling and contributing to that statistic. This is the way it’s supposed to work, after all. Pursue education and come out on the other side with the type of jobs that those without that education don’t have the opportunity to get. Sounds like a winning scenario. Great enough, in fact, to take out the equivalent of this salary amount in student loans. Except once you attend school and unveil the curtains, you suddenly find out that that most common salary is not actually all that common. You find out that what most of your peers wind up earning upon graduation, if they are even able to obtain employment in the field, is a salary much lower than what you were led to believe is a common occurrence. You’d feel a bit disappointed and misled, no? Welcome to the law school market, one of the premier safe houses for misleading advertising.

Through a combination of shady tactics and misleading survey interpretations, a great deal of law schools tout employment rates for their graduates that float between 80-90% 9 months after graduation. In addition, many law schools report median salaries that approach or exceed six-figures for their law graduates. Unfortunately, this is simply not the case based on law school employment data discussed above. Without diving too hard into the details, it is now known that as recently as a few years ago certain law schools were providing misleading employment data for their graduates. Although there has been a cleanup effort over the past few years, the way the reporting is done still leaves much to be desired. Because of this, when viewing law school employment data straight from a law school’s website, do not believe everything that you see. Refer back to Law School Transparency.

These incomplete employment statistics promulgated by law schools to prospective law students are compounded by the unique and harsh reality of the legal market itself. Unlike many other fields, there is a sharp divide between salary outcomes after graduation. This sharp divide is known as bimodal distribution. Upon graduation, law graduates are separated into two distinctly separate salary groups, with little opportunity in between. These two salary groups are the following:

1. Big Firm Salaries (100K+)

2. Small Firm Salaries/Public Interest/Government (30-60K)

It is quite rare for a law graduate to land a position somewhere in the middle of those salary figures. Most often, it is either one or the other. Counting on landing at a job with a salary that is in the middle between these two salary groups is just unlikely. This doesn’t seem bad though, right? Looks like a solid 50/50 chance. Not happening. According to NALP, the chance of striking it big at a firm that pays over 100K is very low. For example, examining firms with 500+ lawyers, the firms that account for at least 90% of such opportunities in the legal field, shows the following for the Class of 2015:

“…the number of jobs taken at the largest firms — those with more than 500 lawyers — increased modestly to push their share of law firm jobs up by two percentage points, from 21.3% of law firm jobs to 23.3%…”

This translates to 4,007 jobs per this chart. That might sound promising, but only if you don’t factor in the fact that there were about 40,000 law school graduates in the Class of 2015. To be as positive as possible, let’s use the 5,100 job figure from 2009 to do some basic calculations. If we were to use this 2009 figure to calculate the probability of any one law graduate landing a six-figure salary after law school, a mere 12.8% of law school graduates would have this opportunity upon graduation. To be even more positive, let’s add an additional 10% to the 5,100 figure to cover the firms under 500 lawyers that may pay six-figures as well. With this addition, the total jumps to around 14%. This means that after adding an additional 10% to the most recent peak in 2009, a law graduate has a probability of about 14% of landing a six-figure salary after graduating from law school. Except, of course, not all law schools are created equal. These opportunities are heavily skewed towards the Top 14, with slim pickings getting slimmer the lower down the rankings you travel. And, to repeat, these statistics are inflated based on the 2009 peak.

After adjusting for the 1-3,000 magical in between jobs that may be available at medium salaries of 70-90K after graduation, the probability of obtaining a starting legal position near or above six-figures rises to an overly optimistic total of about 21.5%. Guess the salary of the other 78.5% of law school graduates? It’s either in the small firm category, which can range anywhere from 30-60K, or even less if the graduate is unemployed or underemployed. This includes law graduates attempting to strike out on their own after graduation by going solo. Therefore, on average, not only does a prospective law student have around a 66% chance of finding any legal employment post-graduation, but within that 66%, only about 14% of those available legal jobs pay handsome salaries that justify the extra 3 years of education and potential debt. Someone can make the claim that these are just the starting salaries, but the harsh reality is that the legal profession very rarely allows for large upward climbs in salary over time. Sometimes some (have you taken the LSAT?) can wind up making partner at a big firm, or wind up a lucrative partner at a small firm, but these are the winners. Everybody else toils around for years within a certain salary range, and that’s if they choose to stick around in the legal field. There is no guarantee that your salary will continue to increase over time, otherwise the mean employment salaries for lawyers would bear this out. Instead, it’s a battle between the few top tier salaries and the mediocre remainders, and the gap is so large that the average actually looks good and provides for great marketing. For a great article discussing the bimodal salary in the legal field and some important employment and salary statistics from recent years, check out The Toppling of Top-Tier Lawyer Jobs from the New York Times.

B. Debt

The average law school student attending a private law school has a debt total around $125,000 upon graduation (not including any undergraduate debt). What do you think happens to individuals that decide on going to law school, accrue six-figure debt in the process, and graduate unable to secure employment in that top 14% salary range (a salary that can handle those debt totals)? Unlike other types of debt, educational debt is not dischargeable in bankruptcy. Those payments follow you forever. Although there are now ways to minimize the student loan payments by enrolling in safety net repayment plans such as IBR and PAYE, qualification for these services requires proving a partial financial hardship. How many prospective law students enroll in law school with the goal of graduating with a financial hardship? This reversal for many law students, six-figure debt and small salaries instead of the often anticipated six-figure salary and minimal or manageable debt, is the little secret the law schools don’t disclose to prospective law students. If you’re going to finance law school with student loans, you must understand the potential consequences.

In the end, this is not meant to discourage you from going to law school. These are just 3 very important points you need to understand about the law school process and the legal market. Understanding them will enable you to make a much more informed decision about attending and allow you to research each law school on your acceptance list more efficiently before deciding on enrollment. If you are heading to Harvard, Yale, or Stanford, you are likely to escape these dire statistics. However, any other law school has its potential risks. Risks that all too often many law graduates find out about too late in the process. Nobody wants to be on the wrong side of these statistics. Because you cannot roll back time, you must understand these risks ahead of time. They are too grave to ignore. Do your research, understand how student debt can change your entire life, evaluate your options, and come to a reasoned decision. That is the only way you should approach thinking about law school. For another important discussion, visit the Pre-Law Questionnaire article.

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