Human beings have a tendency to hold onto perceptions far longer than evidence allows. This cognitive bias infects much of our decision-making in politics and in life. Once we learn something, we tend to hold on to that knowledge, even when the knowledge itself has changed. This is why professors who learn their field in the 1970s and 1980s can find it difficult to update their classes with the most recent advances. In politics, policy change can be wrenching precisely because the best course of action is different than a politician's previous experience.
Today, most people's perception of law school is vastly out-of-date. Once the ticket to the upper middle class and prestigious careers in cosmopolitan cities, a legal education is increasingly entering a grey zone: for some it can be helpful, but for too many, there is a mismatch between desires and reality. This post analyzes the current trends.
Law School Economics
Understanding the changes that have happened to the legal career path requires a basic understanding of law school economics. The Bureau of Labor Statistics shows that there are 759,200 lawyers in the United States in 2008, and that growth should be around 13% over the next ten years, in line with the general growth in employment for the nation.
The number of graduates of law schools has increased in recent years as well, even over the highs of the late 1990s. According to the American Bar Association, in 1999-2000 there were 39,071 law school graduates compared to 43,588 in 2008, a growth rate of about 11.5%. Thus, the growth in the number of graduates is lower than the growth in the number of positions.
What is the problem then? Let's look at those numbers again. The number of legal positions is expected to be 857,700 in 2018. The number of students who will graduate over the coming decade will be 435,880, assuming no changes to the number of law school graduates. That means that graduates will replace half of the market for attorneys in the United States over that time frame. Complete replacement would occur in 19.6 years, again assuming no change to the employment market or number of graduates. Even allowing for an older age of 30 before lawyers enter the market, it is unlikely that the vast majority of attorneys will retire in a twenty year cycle.
Thus, the problem is market saturation. There are too many law graduates competing for too few positions. There was already too many graduates before, and the issue is being compounded by the growth in the number of law grads.
We should consider some other effects though. Some lawyers do not actually practice the law, which means that there are actually fewer graduates on the legal market. This number is difficult to discern and is compounded by the close relationship between the health of the legal market and the number who attempt to enter it (needless to say, arguing that the market for law grads is better since some are not getting legal careers is dismal)
A second possible problem is the effect of outsourcing. As a recent article in the New York Times has described, legal outsourcing has become more common, and indeed, may be the way of the future in coming years. Thus, the legal market may actually be more bleak than the current BLS numbers would indicate.
The question arises at this point: why are these numbers skewed? My answer, like most bloggers on this topic, is the American Bar Association, which has been all-too-eager to accredit new law schools despite these numbers. These new schools may increase the quantitative power of the ABA, but it is doubtful that such a strategy is a smart one for that organization.
Law Student Economics
Law students face an astonishingly high rate of tuition and fees at law schools, even at in-state public schools. From the ABA's numbers, the average in-state tuition was $16,836, and private schools were $34,298. Add in the cost of living and a host of other expenses, and suddenly costs can reach as high $60,000 per year.
Most students take out loans to cover these costs. Using a student loan calculator, we can see that those taking out $60,000 in loans would pay $690.48 per month for ten years, while on the high end, those taking out $150,000 in loans would be expected to pay $1726.20 a month for ten years. Of course, this is just for law school. Many students are already burdened with loans from their undergrad years, and those will be in addition to the numbers listed above.
Following a typical rule of thumb on student loans, a graduate should make an entry-level salary equal to the size of student loan. Thus, a student who takes out a$100,000 loan should expect to make the same amount as a starting salary. Thus, the natural question to ask is what are the current starting salaries for new lawyers?
That National Jurist looked at these numbers back in January 2008. On the high end, Columbia graduates make $145,000 starting. What surprises some people though is how low the salaries can be at many law schools. The median salary is significantly lower, about $65,000, and only 21 schools have averages above $100,000. Many law schools are below $50,000. Thus, the problem for the law school graduate is paying off large loans at salaries well-below recommended levels.
These numbers come before the recession, which has not only lowered salaries, but decreased the percentage of graduates finding employment at all. Thus, the situation is worse than these numbers indicate.
Finding the Right Path
As demoralizing as these numbers can be, the legal profession should not be written off haphazardly. There are several considerations to take into account to make an informed decision given this background.
First, any discussion of law school should begin with interest: why do you want to go to law school? This is the most obvious first question, but can often be unasked by political science and English majors who feel that law school is simply the next step in a path. Careful analysis of this question includes shadowing attorneys, participating in mock trials, and discussing options with current law school students and practicing attorneys. Interest in law must be the first consideration.
The next topic is finances. Law school students must calculate their expected debt load against their projected income. This can be astonishingly difficult. Most law schools shroud their actual employment numbers behind obtuse websites, or provide highly-suspect statistics that are at best misleading (and at worse, fraudulent). My suggestion is to start with the size of debt. Consider options for reducing it at the outset, and also options for paying it back. Some schools offer public service options known as LRAPs, and income-based repayment plans may be an option as well. Be wary of the starting income numbers provided by law schools, but use them as a guide, and be sure to talk to alumni of any law school you are considering.
Next, the issue of prestige is paramount. Law is a field that is based on pedigree. One only has to look at the current U.S. Supreme Court members and the partners of any major law firm to see that only a handful of schools feed into the best legal positions. Any law school applicant must consider their goals and whether their choice of school will position them for success. At the same time, if one is considering options like public service, accepting a position at a lower-ranked school with full aid may be a better strategy. My advice is to aim as high as finances and personal goals allow.
This last point leads to a discussion of education quality. While lawyers are certainly not the same, the only criteria for practicing law is passing the bar examination. Thus, bar exam pass rates indicate how successful graduates are with their legal education. These rates vary dramatically from school to school (sometimes depending on the difficulty of a particular state - California's bar exam is notably more difficult than other states' exams). Remember, no student will receive a refund if they do not pass.
With these pieces in mind, definitely tap the vast resources of the internet as well. There are websites for applicants as well as blogs that discuss the legal profession. Above the Law is a favorite.
Law school is not as bad as some make it out to be. However, there has to be some humility when approaching the application process and potential employment options. Top students will continue to do well, but others may want to save themselves significant grief and avoid those schools lower in the law school pecking order. That is a little harsh, but then again, I do have to fight off that cognitive bias.
Posted on August 26, 2010