Is Earning A LLM Worth It?

I have occasionally been asked by law students whether they should go for an LLM.  Earning the LLM is quite expensive and there have been a number of posts lately (ATL, WSJ, Law) debating its relative merit.  If you are a law student considering an LLM - or a foreign student considering an LLM, please read below.



First, let's look at the cost of the LLM.  You would be paying another full year of law school tuition and would need to support your living expenses.  Consequently, this typically means another year of loans.  Your first thought might be that this additional year will only increase your indebtedness by a third (three previous years of law school plus one more for LLM.)  However, you would be neglecting the cost of an additional year's worth of interest for the three previous year's loans.

For example, assuming for the sake of simplicity that 1) you have a total of $180K in loans from your previous years, 2) assuming that $150K of them are not paid for by the government while you remain in school, 3) the average interest rate on the $150K is 8% - then that's an additional $12K in interest.  Consequently, assuming that you would have to take out $60K in loans to pay for the LLM, be aware that your total indebtedness is actually going in increase by $72K.

This means that at the end of your LLM, you will likely be about $250-$300K in debt.  At an average interest rate of 8%, that's a loan payment of $24K/year.  Also, even if you win the big-firm lottery and get the high-paying job, recognize that you will be taxed at a top rate of about 45% (after federal, state, and FICA), so that $24K really represents about $37K/year of your earnings.

Additionally, if you are comparing the cost of the LLM to how much money you would have made over your working career otherwise, then here's another year of lost income.

Consequently, you can see that the LLM degree is quite expensive, especially after law school.  However, it might be worth it if it helps you get a job, right?  Especially in today's extremely competitive market.

Unfortunately, as noted in the articles that I cite above, law schools are resisting the collection of statistics with regard to the return on the LLM degree.  That alone should tell you something.  Also, if you get to your 3L year and realize that the law schools have lied to you about the opportunities available for law graduates - buy hey, they have this great new LLM program that will help you get a job - maybe you should really pause and think about the source.

Here are my experiences with the LLM degree:

First, if you are going to work at a law firm, the LLM is really only has value (and maybe not that much value) if you are going to work in tax - and possibly bankruptcy - which are extremely regulation-heavy.  In these fields, the LLM can be desirable precisely because the fields are so regulation-heavy - that is, the LLM in these areas is actually helping the student to accumulate knowledge and familiarity with the regulations that are desired by employers.  Consequently, LLM students may have an advantage in these areas.  However, the advantage may not be significant.  It's not going to overcome poor law school grades - and it is probably not needed if there are high law school grades.

I have not seen any advantage provided by an LLM in any other area - including intellectual property.  Most other areas are more case-driven than regulation-driven.  Consequently, the education provided by one year of actually working in the field is far better than that provided by getting an LLM.

Second, to be a little clearer about the recruiting, outside of tax, law firms are somewhat strange about how they handle LLM recruiting.  For some firms, they consider LLMs as laterals and compare them to other second year associates that they might be hiring.  Of course, the LLM is not as good as firm experience (although it it better than nothing), so the LLM grad is typically at a disadvantage as compared to a lateral.  To understand why many firms do this, recognize that LLMs don't really fit in the law firm recruiting model that well.  For example, many law firms will interview 2Ls, have the 2Ls work there for the summer and then make offers based on the extended interview of the summer.  However, for an LLM, there is no comparable program.  The LLM will not have the opportunity to work at the firm before the hiring decision has to be made.  This is one reason that the LLMs are often considered my like laterals than law students.

For firms that consider LLMs as compared to 3Ls, recall that many law schools have career services offices that may not be on the ball with regard to providing interviewing opportunities to LLMs.  Often LLMs complain that they have not been informed of opportunities going to 2Ls or that the Career Services Office is not able to help them.

Third, LLMs are being marketed to foreign law students and lawyers as a way to crack into the US legal market - I think that this is one of the factors behind the 65% rise in LLMs as cited in the articles.  Unfortunately, the LLM is typically not useful this way.

If you are a foreign lawyer (and from reviewing the site traffic, I am surprised how many people are viewing this blog from a foreign country), do not think that you can take a one-year LLM program and compete directly with 3Ls.  I don't know any firm that will regard your foreign law experience plus one-year LLM as the equal of the 3-year JD degree.  You may be able to market yourself to a firm that does specific cross-boarder work with your country, but that's a pretty small target to sell to.

Fourth, sometimes the LLM is marketed as potentially attractive to law schools if you are thinking about being a professor.  There may be some small advantage here, but not a lot.  In this regard, the advantage is probably less about anything that you learn with the degree, but the prestige of having the degree.  Also, in this regard, recognize that you may be able to leverage your school position based on where you get your LLM.  For example, a JD from Iowa, but an LLM from Harvard may open some professorial recruiting doors because of the Harvard name on the resume.  However, there is no need to take the LLM immediately after the JD - even in this situation - because there will be less advantage to an inexperienced practitioner in "trading up" this way.  It would be more advantageous to practice for 5 years or so and then get the LLM.

Finally, in terms of how many practicing lawyers have LLMs (outside of tax and bankruptcy), the number is extremely small - maybe 3%.  Nor have I seen any advantage inside a firm to anyone having an LLM degree.  Similarly, I have not seen any client make a hiring decision based on a lawyer having an LLM degree - other endorsements seem a lot more important in client eyes.

In summary, if you are going into tax and bankruptcy, then interview during your 2L year.  If you are unsuccessful and your grades are pretty good, then consider the LLM.  If your grades are terrible, the LLM is not going to help.  If your grades are great, then there may be some other aspect of your persona that you should think about working on.

Conversely, if you are outside of tax or bankruptcy, don't bother.  The LLM will cost you far more than you will get back out of it.