Law Schools typically push graduating students to undertake clerkships, but do clerkships really make financial sense for the law student? The law student that undertakes a clerkship will spend one to two years working for a judge, often writing or revising the judge's opinions or performing other research work. Law schools fixate on the "prestige" of the clerkship and the "valuable experience." However, it is often only top students that are accepted into clerkships - the same students that would be taking the (admittedly few) jobs available at the top of the salary range. We will take a look at the pros and cons of clerkships below.
First, let's look at what the student is passing up to undertake the clerkship. Admittedly, legal jobs are scarce right now with only about 38% of graduating law students getting the job that they want. So if a graduating student can't find anything but a clerkship - then take the clerkship! It's better than nothing. However, a number of law students that are considering a clerkship are typically high in their class and would represent the approximately 10-15% of the class that would be able to get a starting salary at or exceeding $145K. Consequently, they are passing up about $100K/year in income for 1 to 2 years in order to undertake the clerkship.
Additionally, they would typically not be able to pay down their student loans during the clerkship, so the loans would continue to grow. For example, consider a student with $200K in student loans at 6.5%. The student would have to pay $13K in interest before they would even touch the principal. That's not feasible on a $40K salary in most cities. On the other hand, if the student starts working at a law firm for $145K, then they can start paying down their loans immediately.
I note that many firms give a "clerkship bonus" when hiring a student our of a clerkship. However, the bonus is typically mush smaller than the lost income - often $10K-$30K. Certain students that complete more advanced clerkships (such as a Supreme Court clerkship) can get more, but it typically takes an even longer committment. For example, most SC clerkships require that you have already performed another clerkship.
Once the student completes the clerkship and joins the firm, they are typically given the salary of their "graduation year", but nothing more.
Consequently, considering the costs and benefits, we can arrive at a ballpark cost for an average one-year clerkship - say -$100K for salary - $20K for loan interest and repayment delay + $25K for bonus = $95K as a cost to the student to undertake the clerkship.
But what do students get for their $95K? In the next post we will take a look at the typical reasons to complete a clerkship that law schools tell students.