tag:blogger.com,1999:blog-35213180648268487122024-02-06T23:06:37.982-06:00The Legal DollarPersonal Finance for Lawyers and Law StudentsManaging Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.comBlogger133125tag:blogger.com,1999:blog-3521318064826848712.post-39932488232767783022017-01-06T19:27:00.000-06:002017-01-06T19:28:35.364-06:00Check out "The BigLaw Investor" Site For Great Personal Finance InsightsAs any practicing attorney knows, being "too busy" is a double-sided coin. On one side, it means that things are going well, but on the other side it means that you don't have time to do the fun, extra things that you like to do - like write posts for a blog about personal finance for lawyers!<br />
<br />
Fortunately, although I have been far too busy over the last several months to advance the ball, another blog has stepped up and it is really delivering the goods. I am talking about <a href="http://www.biglawinvestor.com/" target="_blank">The BigLaw Investor</a> ! I recently found out about them and I have read a bunch of the posts - and I really recommend that you check them out. The financial insights for young, practicing attorneys are very good. I have also added them to the blogroll at the right.<br />
<br />
All the best to you on your financial journey and I hope to be able to get back to posting later this year.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com3tag:blogger.com,1999:blog-3521318064826848712.post-5983509718973091242016-05-27T13:05:00.001-05:002016-05-27T13:11:30.773-05:002015 Chicago-Area Law School Placement DataHi All! I haven't posted for a while - mostly because it seemed like other voices were pretty much saying everything that needed to be said! (In fact, it has been so long that Google has completely changed the posting user interface, so this is kind of a learning experience!)<br />
<br />
However, the 2015 law school employment data is coming out and I have started to get inquiries from young people thinking about going to law school as to whether I think it is a good idea to do so - and asking whether one law school is a better bet than another. In that regard, one of the most important items to consider when thinking about law school is whether you will be able to get a job as a lawyer - and more specifically a full-time, non-short-term, JD-required job not created by the law school itself.<br />
<br />
Overall, I note that legal employment remains bad and is actually getting worse in real number terms - but slightly better in percentage terms because fewer people are attending law school. As mentioned in <a href="http://www.abajournal.com/news/article/employment_data_for_2015_law_school_grads_released_by_aba_legal_ed" target="_blank">this article</a>, the actual number of law school graduates in the class of 2015 declined by 8 percent - while the number of jobs only declined by about 7 percent, which means that on a percentage basis a slightly higher percentage of graduates found jobs, but in real numbers there were far fewer jobs overall.<br />
<br />
The ABA's 2015 actual data is <a href="http://employmentsummary.abaquestionnaire.org/" target="_blank">here</a>
- the table is a mess, but you are going to want to divide column B
(EmployedBarPassageRequiredFTLT) by column AK (TotalGraduatesNumber) to
get the percentage you are looking for. Because I usually get questions from people deciding between Chicago-area-ish law schools, I wanted to focus your attention on the odds of actually getting a job as a lawyer after attending those schools. Here are the stats:<br />
<br />
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CHICAGO, UNIVERSITY OF<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>90.82%</div>
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JOHN MARSHALL LAW SCHOOL<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 1;"> </span>50.92%</div>
<div class="MsoNormal">
MICHIGAN STATE UNIVERSITY<span style="mso-tab-count: 2;"> </span><span style="mso-tab-count: 1;"> </span>49.48%</div>
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VALPARAISO UNIVERSITY<span style="mso-tab-count: 1;"> </span><span style="mso-tab-count: 2;"> </span>41.98%</div>
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Some comments:<br />
1) My personal metric is that it does not make sense to attend a law school which has less than an 80% chance to land you a job as a lawyer. How big of a risk do you want to take with your future? Even if a law school is going to offer you a complete scholarship, it does no good to waste 3 years of your life obtaining a degree for which you can not find a job. In this regard, I note that only a few law schools in the Chicago area make the grade - U of C, U of M, and Northwestern.<br />
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2) One surprise was the performance of John Marshall relative to DePaul, Kent, and Loyola. All of DePaul, Kent, and Loyola have a better reputation, but it is not translating into significantly increased job prospects. Additionally, DePaul has only a very slight placement advantage over the other two schools.<br />
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3) It is sad to see how far the U of Illinois has fallen. If now offers pretty much the same placement as U of Indiana-Bloomington, which has a much lesser reputation.<br />
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4) Marquette has held pretty steady - and is at a significant advantage over Loyola and DePaul. These schools seem to be admitting candidates at about the same quality, so consequently, if you are looking for a catholic- based law school among these three then look to Marquette. Of course, if your scores are high enough and you can pay the extra $10K/year, then go to Notre Dame.<br />
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5) Another surprise - Wayne State and Northern Illinois have significantly better placement results than DePaul, Kent, and Loyola. You would not expect that based on reputation.<br />
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6) Valpo - I have talked with at least two people in the past year that were being offered a full scholarship by Valpo, but my feel is that their placement statistics are so low it is not worth the three years of your working life. Just to emphasize this again - on average, <a href="https://smartasset.com/retirement/average-retirement-age-in-every-state" target="_blank">you will have to stop working</a><a href="https://smartasset.com/retirement/average-retirement-age-in-every-state" target="_blank"> by about age 63</a>. Most young people live in a blissful world where they will always be offered a job regardless of age and they will always be healthy enough to work - the statistics seem to indicate that they are mistaken. If you blow 7.5% (3 years of 40) of your working life getting a degree you can't use, then that's going to be an issue. I will probably talk about this more in a future post because young people don't seem to be easily able to grasp this reality.<br />
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What do you think? Were you surprised by any statistics in the list? Any recommendations for potential law students?<br />
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<br />Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com6tag:blogger.com,1999:blog-3521318064826848712.post-88052164888357119182012-02-12T02:44:00.000-06:002012-02-12T02:44:00.913-06:00The University Of Chicago and Yale Law Schools Do What All Law Schools Should Be DoingI haven't been able to post for a while and I wanted my first post back to be up-beat and focus on something positive. In that regard, I want to give some props to the <a href="http://www.law.uchicago.edu/prospective/employmentdata">University of Chicago Law School</a> and here is why:<br />
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First, the U of C <a href="http://www.law.uchicago.edu/prospective/employmentdata">actually tracks the employment information for each and every graduate at 9 months after graduation - and even makes the information publicly available</a>. Check out the data provided at the link. Every single one of the graduates of each of the years of 2008, 2009, and 2009 has been individually tracked and is represented in the chart. For each year, the "employment status unknown" entry is zero. This means that the U of C's statistics are really representative - unlike most other schools that only report hiring statistics for the 30% or so of the class that actually reports them.<br />
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Additionally, the breakdown shows whether the job required bar passage - another frequently cited area where law schools play games. <br />
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They even provide real salary information that can be depended on to be accurate because of the complete student response. That is in great opposition to what seems to be the practice at many law schools where the career services office only wants to hear from the employed, high-salary law students because they can then pass on that information as representative of the graduates as a whole. Additionally, although the U of C declines to provide certain numbers when less than 5 graduates fall in a certain category, that seems understandable to preserve confidentiality - I would maybe prefer the cut off to be 3 graduates, but 5 seems close enough.<br />
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However, the biggest take-away that I have is that the U of C has been quietly doing for several years what many law schools claim is impossible - to track the employment information of all of their graduates. Props to the U of C. <a href="http://www.law.yale.edu/studentlife/cdoprospectivestudentstats.htm">(Props also to Yale, who is also publishing its stats and following up with almost every student.</a>)<br />
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The second thing that I take away from the U of C statistics is that the hiring situation at U of C is actually pretty good - although it has taken a hit lately. To take a look at this, check out their chart of "Full-time Salaries of Employed Graduates" where you can see that the mean of all employed graduates in 2010 was about $123K. That's really not bad at all. However, also note the steep decline from 2008 and 2009's means of $142K and $145K - that's a decrease of about $20K (or about 14%). This decrease would seem to indicate that even graduates at a school as illustrious as U of C are coming under pressure in the current rotten job market, but they are still overwhelmingly able to obtain jobs - albeit significantly lower paying jobs than just last year. Also look at the huge decrease in the 25th percentile numbers - from $160K in 2008 and 2009 to a mere $63K in 2010. Ouch. That's a $100K decrease in just one year.<br />
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Third, just to be clear that I have not flipped my wig and become a rabid shill of going to law school, one thing to mention here is the stark disparity between the U of C's statistics and the statistics of lower ranked schools. That is, although the hiring picture at U of C looks rosy, it looks pretty terrible before you even get out of the top 50 law schools (the top quarter). For example, the University of Colorado Law School is ranked 47, but <a href="http://insidethelawschoolscam.blogspot.com/2012/02/legal-ethics-forum-on-legal-educations.html">as mentioned in this article</a>, only 93 of 183 (50%) graduates had a full time long-term position requiring a law degree nine months after graduation. Additionally, they "were able to identify" only 36 (20%) of those graduates who had a salary of $56,000 or more. <br />
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Considering that $56K is not a sufficient salary to justify the financial investment of law school - but even then only one in five graduates was able to make $56K. A number that I would really like to see would be a calculation of a starting salary that would be sufficient to justify the investment in law school - and then see how many students made this "break-even" number. In one example, <a href="http://taxprof.typepad.com/taxprof_blog/2009/11/schlunk-law-school-is-a-bad-investment.html">considering a Solid Performer would have to start out making $138K/year in order for law school to be a financial success</a>, I would estimate that only about 5% of the University of Colorado grads make the grade. <br />
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So where does that leave us? Well, if you can graduate from the University of Chicago Law School, then your situation is actually looking pretty good. A median of $160K in private practice and mean of $122K for all law students should represent positive outcomes for the majority of law students. However, the fall-off is very quick. By the time you get to the 50th ranked law school, the odds have decreased drastically. <br />
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Where to draw the line? Well, as a ball park determination, if a law school is tracking every student and providing the information like U of C and the mean of all of its graduates exceeds $100K, then it would seem like a student would have a pretty decent chance of landing a job what would let them pay off their loans. (The selection of $100K here is a little arbitrary, but we go into more detail on other pages on this site). What law school ranking does this represent? I'm not quite sure, but the fall-off is really quick. I am familiar with law school numbers for law schools in the 20-30 range and they are not making this number. My gut feel is that the cutoff is really inside the top 10 - and maybe not even all of the top 10.<br />
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So what's the take-away? First, props to the U of C and Yale and any other law school that rejects the "We can't do it" excuse and rises the highest of ethical standards by following up with all of its graduates and making the information freely available. Second, if you can get into the U of C (which is pretty darn tough), then it is highly likely that you can get a job justifying the expense of law school. Third, as you go down the ranking tree from U of C, your chances get worse and worse - by the 20s, you are looking at probably a 1 in 5 chance of making the 100K/year "break-even" salary - and by 47 you are looking at probably 1 in 20. Consequently, don't bother going if you are admitted to a law school ranked worse than 30 - and those ranked 10-30 should be thoroughly scrutinized. Fourth, if a law school will not make information available to you on a student-by-student basis like the U of C does, then it would seem legitimate to ignore their protests of "they can't do it" and assume that the information is so bad that they don't want to provide it. In other words, if a law school won't give out student-by-student information, then you may want to reconsider going there. Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com17tag:blogger.com,1999:blog-3521318064826848712.post-13996201416550491192011-10-27T11:04:00.001-05:002012-02-12T02:44:26.047-06:00Allowing Non-Doctors To Perform SurgeryWhen I see articles about allowing non-lawyers to practice law <a href="http://www.nytimes.com/2011/10/25/opinion/are-law-schools-and-bar-exams-necessary.html?_r=1">(like this one)</a> it really frosts me. The reasons that they cite for their proposition include lowering cost for "legal services" and increasing the number of jobs because more people would be "legal providers". The article also mentions that Clarence Darrow and Abraham Lincoln did not go to law school - seeming in support of law school being irrelevant. <br />
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It seems to me that the reasoning that the article advocates could be applied equally well to other regulated professions such as medicine and engineering. For example, why require surgeons to have gone to medical school or be licensed doctors? It would be cheaper if anyone could just perform surgery without going to medical school - it would also create more jobs because more people would be "medical providers", right? Also, why require engineering school for people designing bridges? It would be a lot cheaper if anyone was allowed to do it, right? The medical and engineering fields have also be "operated as a monopoly" like the legal field, right?<br />
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Also, Hippocrates didn't go to a medical school, so obviously medical schools are a waste of time. Also, Archimedes didn't go to engineering school, so obviously engineering school is also unnecessary and just a way to drive up cost.<br />
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Yikes. I'm a big believer in lessening unnecessary regulation, but the bottom line is that for jobs that could really "mess someone up" if done wrong, society has an interest in trying to make sure that the people who will be performing the job are going to do it right. Today, that typically involves a formalized educational process and an examination (not that that could not be adjusted to include an apprenticeship as well). Is that a guarantee that the person will never screw up? No, but I don't think that anyone would disagree with the proposition that education and testing decrease the number of screw-ups over not having education and testing.<br />
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We have an interest in making sure surgeons know what they are doing before they start cutting and that engineers know what they are doing before they start building. We even license such professions as cosmetologists (before we allow them to perform acid peels on people) and morticians (perhaps because of the emotional rather than physical harm of having one's parent's corpse decompose or be treated poorly, for example.)<br />
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To take the reasoning of the article to the next stage, why not let anyone drive a car? Who needs driver's licenses? Who needs classes or examination? It's a monopoly on the ability to be a driver, I tells ya! They didn't require a driver's license in 1911, so obviously a driver's license is unnecessary! Without the driver's license, there would be more drivers (such as those under 16) and it would lower the cost for driving school!<br />
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Obviously, that's ridiculous. More specifically, just about everyone would agree that such a proposition appears ridiculous right away. However, why aren't people also equally able to immediately apprehend the ridiculousness of the law school proposition? <br />
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I think that it may stem from a basic misunderstanding of what lawyers do and an inability to see the consequences of failure. For example, why don't we let unlicensed people perform surgery? Because the patient is likely to get hurt. Same for engineering- because in the event of a collapse, people are likely to be hurt. Ditto for driver's licenses - people are likely to be hurt. In each case, the harm is physical and is capable of instant recognition - it's easy to see when someone is bleeding or dead.<br />
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However, with law the "hurt" may be less easy to see. What if you are accused of a crime you did not commit, but your unlicensed counsel is unable to defend you adequately because they don't know what they are doing and you are convicted? You get thrown in jail for something that you did not do, but here the jury found you "guilty" - and everyone knows guilty people should go to jail, so where is the harm? Where is the bleeding body? Answer - it's there, but its tougher to see due to the seperation of the process into discrete events. <br />
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Also, I think that some people may ignore this situation becuase they feel that "the truth will come out" or that the "right thing" will just automatically happen. However, this is just magical thinking - and we have many examples of it not being true in practice, even with the requirements of training and licensure which can reduce, but not eliminate, wrongful results.<br />
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As another example, what if your contract is drafted wrong and it leaves you on the hook for liability that you did not intend? Magical thinkers may respond with something like "won't the court just fix it?" Ditto if you write a will, but it is defective and your assets go to someone you did not intend.<br />
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In short, 1) the "hurt" is typically more to a person's "rights" rather than to a person's body - which is a less visible harm, 2) people assume that everything will always go completely right and thus lawyers are not necessary, and 3) there is significant misunderstanding about what lawyers actually do and how our justice/dispute resolution system works.<br />
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<a href="http://abovethelaw.com/2011/10/new-york-times-op-ed-advocates-letting-everybody-play-lawyer/">ATL also has a post on this</a> -and has a killer comment: "Winston says that legal professionals are the one resisting his changes, but actually common sense is Winston’s biggest enemy." Love it! <br />
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<a href="http://lawschooltuitionbubble.wordpress.com/2011/10/25/nyt-publishes-more-shock-doctrine-from-clifford-winston/">Also some good thoughts about this on Law School Tuition Bubble.</a><br />
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</tbody></table>Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com9tag:blogger.com,1999:blog-3521318064826848712.post-8408036901126272102011-10-26T01:58:00.001-05:002011-10-27T11:05:10.703-05:00Inching In The Right DirectionIt's been a few weeks since I last posted - but that's actually good news for the younger set. Frankly, the busier practicing lawyers are, the more likely they are to hire younger lawyers to take some of the load off - and it seems like the majority (although not all) of law firms are continuing to inch back from the recent decline in business. (Note - it is "inching", not "leaps and bounds".)<br />
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Don't get me wrong, going to law school is still not a good idea right now due to the mismatch in terms of number of graduating lawyers and number of jobs available (<a href="http://online.wsj.com/article/SB10001424053111904716604576546403401376210.html?mod=WSJ_hps_sections_careerjournal">even the WSJ admits that the legal field is the MOST difficult for placement of any field - with fewer than one job opening per 100 people employed in the field</a>). However, job placement odds for those graduating in spring 2012 are likely to be slightly better than 2011. <br />
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How much better? <a href="http://thelegaldollar.blogspot.com/2010/08/as-reported-at-abovethelaw-and.html">Last year I reviewed the NALP data</a> (which is self-reported by law schools and typically paints an overly rosy picture) and we found that only about 40% of law school graduates got a "real" lawyer job (not part-time, not temporary, and they were satisfied with it) while another 20% got kind of an "unsatisfactory" lawyer job (not part-time, not temporary, but they were unsatisfied and continuing to interview). That's about 60% of the graduating class getting at least SOME job as a lawyer, even if unsatisfactory. <br />
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The class of 2011 data does not appear to be out yet, but I would expect it to show a single digit improvement for the class of 2011 - maybe about 5% in total hiring (60%->65%) with the majority of that increase coming from lawyers getting "real" lawyer jobs. From my conversations with lawyers at other firms,<a href="http://thelegaldollar.blogspot.com/2011/02/tiny-green-shoots-in-legal-hiring.html"> it seems like the trend that I noted here in early 2011</a> did indeed come to pass. I would then expect to see a similar increase in hiring for the class of 2012.<br />
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So where does that get us? I would predict that for 2012 graduates you will see about 50% employment in "real" lawyer jobs and about another 20% in "unsatisfactory" lawyer jobs for a total new grade lawyer job hiring rate of about 70%. That's a welcome increase, but not a green light for going to law school - I would describe it as "the law students are slightly less screwed."<br />
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Keep in mind that the <a href="http://www.nalp.org/classof2010_salpressrel">average salary for a lawyer job fell significantly from $72K in 2009 to $63K in 2010</a>. We are likely to see some increase from $63K in 2011 and 2012 due to the increased hiring and better quality of jobs being offered, but I don't think you are going to see it get back to $72K for 2012. Additionally, in order to catch up in real dollar terms to the 2009 salary (assuming inflation of 3%), the 2012 average salary would have to be about $78.6K - and that's certainly not happening.<br />
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A favorable trend that I note is<a href="http://www.thecollegefix.com/post/9359"> the 10% decrease in the number of law school applicants this year and the 18.7% decrease in the number of LSAT takers.</a> However, this is a decline from the wildly inflated number of people that have applied to law school and taken the LSAT in the last few years. It should also be noted that <a href="http://lawprofessors.typepad.com/law_librarian_blog/2011/09/applications-are-down-at-law-schools-does-it-matter.html">we are still talking about 78,900 applicants for about 45,000 law school seats</a>.<br />
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Here's an interesting calculation (although admittedly simplified and fudging some factors) that might help provide some insight into the supply-demand mismatch - take the 45,000 law school seats and apply my proposed 2012 ratio for lawyer jobs of 50%/70% (22,500/31,500) and compare it to the number of law school applicants. We find that of the 78,900 people applying to law school this year (the supply), their odds of getting a "real" lawyer job is (22,500/78,900 = ) 28.5%. Ouch.<br />
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Also, note that as long as the number of applicants (78,900) exceeds the number of law school seats (45,000), we are unlikely to see a sizable net reduction in the number of graduating law students. Law schools are likely to continue "filling their classes," although likely with people that are not as well qualified, because they need to keep bringing in the money to stay open. I really think that we need about another 30% decline in law school applicants (putting the number at about 55K) for an impact to really be felt.<br />
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In general, decreasing numbers of law students and incrementally better hiring are steps in a good direction. However, we are still just inching in the right direction - and we have a long way to go before law school becomes a reasonable financial decision.<br />
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For another take on this (although generally in agreement) from a lawyer with a lot of practice experience, <a href="http://thebellyofthebeast.wordpress.com/tag/law-school-applicants/">check out this article.</a>Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com1tag:blogger.com,1999:blog-3521318064826848712.post-37025368661021500182011-08-28T19:31:00.006-05:002012-09-20T22:37:57.530-05:00What Do College Students Really Want - And Can They Get It From Law School - Part 4In <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want.html">Part 1</a> of this series, we discussed how most college students really deep down want a personal balance of four things - <u>1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time</u>. But can working as a lawyer really provide these things? <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want_08.html">In Part 2, we took a look at the Money factor</a> and determined that it was unlikely that working as a lawyer would be able to provide the amount of money that most law students expect at this time. <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want_15.html">In Part 3, we took a look at the Job Security factor</a> and determined that a job as a lawyer is not very secure. In this post, let's take a look at the Appealing Job factor.<br />
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Of all the factors, the Appealing Job factor probably varies the most from person-to-person. There are some generally accepted principles of what may make one job more appealing than another, but much of a job's appeal is based on the personal characteristics of the person making the choice - which can vary widely. <br />
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We specifically talk about Money, Job Security, and Free Time in other posts, so I will try not to talk about them much here. Obviously they can influence the appeal of the job, but let's look at some other factors.<br />
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Here are a list of elements that most people would generally agree make a job more appealing - not counting money, job security, and free time. It's not a complete list, but it's what comes to mind right now based on my conversations with people about their expectations of law practice.<br />
<ul>
<li>Not hard physical labor - indoors with air conditioning </li>
<li>People respect you for what you do</li>
<li>You get psychological reward from your work - help someone/make a difference</li>
<li>Not a lot of pressure </li>
<li>People you work with care about you - Good working environment - Ability to have social interactions with coworkers </li>
<li>Ability to explore topics that interest you</li>
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Now let's take a look at the factors. In law, assuming you can get a job, you will usually be working indoors with air conditioning. That's usually much preferred by people going into the field and is very nice on hot or cold days. Of course, after about 10 years, you might appreciate a job that lets you get up and move around a little more, but overall it is a plus.<br />
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<span style="font-size: large;">With regard to people respecting you for what you do</span>, if you make it to judge then you pretty much get respect. Other than that, there is typically a very limited field of people who will respect you for what you do. The majority of people tell a lot of lawyer jokes - and usually mean them pretty seriously. They "already know all about you lawyers and how you are." If you are a regular commercial lawyer, pretty much the only people who respect you are your clients - and maybe some other lawyers. If you are a prosecutor, some "tough on crime" people will certainly respect you, but many others may not. Conversely, if you are a public defender, some of your clients may respect you, but the court and the prosecutors usually wish you didn't exist.<br />
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This is in contrast to several other careers that you might be considering. For one, doctors get more respect. From talking with my doctor friends, their clients also seem a lot more thankful. Another career that gets more respect is that of a teacher - and they work a LOT less than most lawyers. Also, how about a police officer? More people will respect them for "putting their lives on the line" - <a href="http://thelegaldollar.blogspot.com/2010/09/get-benefit-of-law-school-without-loans.html">although when the workplace death rate and the suicide rate are combined, lawyer is a more deadly career than police officer.</a><br />
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<span style="font-size: large;">With regard to helping someone or making a difference</span>, the opportunities for most practicing lawyers are few and far between. It's nice to see a building that you did the legal work for get built or a product you helped bring to market appear on the shelves. However, if you aren't focusing on studying criminology theory or representing individuals fighting injustice this sensation can often be missing. For most non-criminal law, non-family law lawyers, there's not a lot of human element involved - and consequently not a lot of the "I feel good because I helped a human" feeling. Of course, from what my colleagues in the criminal area tell me, that's actually a good thing. The sheer amount of pain, recidivism, and hopelessness that people I know in criminal law are exposed to daily is just staggering. They often feel like they are locked into a system and powerless to make any real change.<br />
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Of course, there are a couple of areas that seem more psychologically rewarding - immigration law seems to be one - and I am sure that there are a few others. Note that in immigration law, there is the opportunity to really make a fundamental difference by getting someone citizenship - and the people sometimes seem to thank the immigration lawyer for their later success. It's a positive event in their lives rather than (for example) some criminal trouble that they want to forget. Also, considering other careers, you may feel that you are better able to make a difference for someone by being a teacher or a doctor, for example.<br />
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<span style="font-size: large;">With regard to pressure</span>, nobody wants to be pressured. Even an enjoyable experience can be ruined by pressure. Don't believe me? Think about eating the best meal you ever had - now think about a coach yelling at you while you are eating that you have to "Eat faster!" "You are way behind!" "You have 5 minutes to finish and then we are taking away the plates!". Your enjoyment of the meal would probably be impaired.<br />
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Needless to say, there is a LOT of pressure in law. It's going to vary with your specific situation, but it's probably one of the highest-pressure professions around. I have yet to meet a potential law student whose fantasies of what the practice of law will be like actually included any realistic element of the amount of pressure that will be placed on them.<br />
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<span style="font-size: large;">With regard to people that you work with caring about you</span>, some firms make a real effort to try to stay human. It's really not very easy to do with the time pressure and the fact that most lawyers really work on projects by themselves - and social time, time spent caring about other people at work, is non-billable. Also, lots of lawyers are pretty standoffish and individualistic by nature.<br />
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Also, (and I see this one often hit women especially hard) in a regular business where people clock in and out, talking to a co-worker might help you get through the day. You work a little, talk with co-workers when you need a break or some psychological reinforcement, and then get to leave at 5pm having put in "a full work day". Conversely, in law, every minute that you spend talking with the co-worker is a minute that you will have to stay later doing work. Thus, there is a massive disincentive to talk with others. Also, it's pretty reasonable for people to get pissed at you if you are using up their time - you are actually making them stay at work later. It's one reason why "mentoring" is so hard. It's also why firms are often seen as very cold. Time also becomes a precious commodity - and some can view uncompensated time spent mentoring or talking to co-workers as taking away time spent with family.<br />
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The bottom line is that they want to care - and they do - but with the incentive model set up the way it is, they have to express their care in a different way from what people might expect - especially because people may be familiar with how care is expressed in situations where time is not a limiting factor. Unfortunately, there is often a great mismatch between how people would prefer that others demonstrate that they care and how lawyers and law firms are able to do so.<br />
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<span style="font-size: large;">With regard to being able to explore topics that interest you</span>, the time pressure can also be limiting. Even assuming that you are lucky enough to work in an area that interests you, after several years of practicing in that area you pretty much know all about it. If you want to learn a new area, but it's not client work, then it is on your own time. I'll contrast this with<a href="http://newlearnings.posterous.com/google-friday"> Google, which has its employees set aside their day-to-day work every Friday and explore something new.</a><br />
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So you can see that for most of the Appealing Job elements that people commonly identify, practicing as a lawyer is not really that great a fit.<br />
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Of course, depending on your specific personality, there are aspects of practicing law that can indulge you/provide you with psychological rewards quite well. These may include:<br />
<ul>
<li>You like power/control</li>
<li>You like conflict</li>
<li>You enjoy being angry</li>
</ul>
<span style="font-size: large;">With regard to power/control</span>, some lawyers really enjoy it, and some areas of law give you the opportunity to really indulge it. For example, I have met prosecutors (although not all prosecutors) who really get a psychological reward by exercising their power to put people in prison. This can be more psychologically rewarding to them than even being a police officer, for example, because there is typically even less review of the actions of the prosecutor. Additionally, review of your decisions as a judge may be only under an "abuse of discretion" standard, so you have a LOT of free reign.<br />
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<span style="font-size: large;">Really </span><span style="font-size: large;">enjoying conflict </span>can make for a very bad person to be friends with, but can make for an effective lawyer. Instead of being run down by the constant conflict like most people, the conflict may energize them. People that are always looking for a fight can be effective in some areas of law - and if you are looking for a fight in law, you are going to find one.<br />
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<span style="font-size: large;">Similarly, some people seem to enjoy rage</span>. Some seem to only feel in control when they are angry. With some, it feeds into enjoying conflict. They are angry so that they can make you angry so that you will be in a conflict, which they will enjoy. Of course, there aren't too many careers that will pay you to write angry letters to someone. Similarly, there aren't too many careers where, if your anger causes the problem to get bigger, the client might end up paying you more. Further, clients sometimes like to see their lawyer angry - it justifies their own sense of outrage and gives them the belief that the lawyer will be more aggressive on their behalf. Of course, even if the lawyer is more aggressive, it may not actually be to the long-term benefit of the client.<br />
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OK, I don't want to paint too grim a picture, but when a potential lawyer is trying to balance the four factors of 1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time, it should be recognized that Appealing Job is probably going to be one of the more negative factors that will need to be balanced out. Taken as a whole, with regard to the psychological reward factors outlined above, the practice of law is usually considerably less on the Appealing Job scale than the average college graduate office work for an average company.<br />
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Unfortunately, most potential lawyers rate "lawyer" as higher than average on Job Appeal. They typically fantasize that they will have the same level of psychological assistance and care from co-workers - as well as free time - that they would have if they were working in an office job, and they will have the added "respect" of the title of "lawyer". However, that's just not an accurate representation of the environment.<br />
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Now, I'm not saying that no one should even be a lawyer, but with regard to the Job Appeal factor, potential lawyers should recognize that it is kind of like having to work at a sewer waste processing plant. It's not a plus, and they should have to pay you more to compensate for it. It's not like working for some charities where you get constantly thanked and substantial psychological rewards - which makes up for the lower pay.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com2tag:blogger.com,1999:blog-3521318064826848712.post-26239283502121373742011-08-18T21:19:00.002-05:002011-08-28T19:32:45.204-05:00When Is A Default Not A Default?AboveTheLaw (ATL) had a post today entitled "<a href="http://abovethelaw.com/2011/08/the-student-loan-bubble-only-stupid-people-will-be-surprised-when-it-bursts/">The Student Loan Bubble: Only Stupid People Will Be Surprised When It Bursts</a>". The post derives from <a href="http://www.huffingtonpost.com/2011/08/17/student-loans_n_929516.html">this Huffington Post article</a> that details the massive and sudden increase in student loan debt from from 440 B to 550 B since 2008 - a 25% increase over three years. I would also be really remiss if I did not point out that <a href="http://lawschooltuitionbubble.wordpress.com/">LawSchoolTuitionBubble</a> (LSTB) has been calling attention to this for some time and <a href="http://www.blogger.com/">his most recent post on it</a> suggests that the total numbers may be even greater.<br />
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As opposed to the ATL article, I don't want to call people stupid - maybe "not paying attention" or "not understanding the consequences" would be better phrases. However, when one looks at the data, it really does seem pretty apparent that there is an increase in the asset price (college degree) that has become decoupled from the underlying economic reality - at least for most college degrees. The article cites the recent decline in starting salaries for college graduates vs. the increase in tuition in this regard.<br />
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Further, it also seems clear that there is acknowledgement of the risk by the agencies evaluating risk. As the article points out, Moody's Analytics has pointed out that:<br />
<blockquote>"many students will be unable to service their loans as income growth falls short of borrowers' expectations."</blockquote>and<br />
<blockquote>"Fears of a bubble in educational spending are not without merit"</blockquote>This is different from the situation in the housing bubble where there really wasn't much appreciation of the system risk until it was pretty much too late.<br />
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What are the consequences of ignoring the problem? The article cites a study from the Chronicle of Higher Education that finds that <u>1 in 5 government student loans that entered repayment in 1995 has since gone into default.</u> I remember 1995 - 1995 was not that bad a year, economically speaking. We were coming out of the recession in the early 90s. It wasn't go-go time, but not bad. Additionally, student debt was much, much less - as recent studies point out, <a href="http://voices.washingtonpost.com/college-inc/2010/01/education_costs_triple_since_1.html">college costs have tripled from 1990 to 2009</a>.<br />
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So if a 20% default rate is what you get in 1995 when you have a) better overall economic circumstances than now, b) less than one third the cost of going to college, and c) increasing starting salaries for college grads rather than decreasing salaries, what is the 2011 default rate going to be? Absent some other factor, it would obviously be more than 20% - likely far, far more. Maybe as high as 50%. That would be terrible and it would be quite obvious that our student loan system was in serious need of reevaluation.<br />
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However, what about those "other factors"? Well, as LSTB has pointed out to me, most federal student loans given today qualify for Income Based Repayment (IBR) which will allow those with student loans to not pay anything if they are not working (in certain situations). Additionally, the loans may be forgiven after 25 years (although there may be a large tax consequence if current law is not changed). The forgiven loans would be a taxpayer expense.<br />
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IBR does strange things to the "default rate." Suddenly failing to make payments to your student loans because you are out of work is not "default" - instead it is just "participation in the IBR program." Consequently, (as governments measure things) the "default rate" is likely to be calculated only based on those who are somehow not included in the IBR program. For example, students have to take affirmative steps in the IBR program to establish how much they are paid - failing so, the remaining debt is amortized over 10 years and students have to pay the (typically higher) payment. I suppose it would count as a default if someone failed to notify the IBR program and then ignored the new letters - and I am sure that of the millions of people taking the loans there will be a percentage that will do so. However, based on the difficulty of actually defaulting under IBR, I would put that percentage at about 2%. Frankly, <u>under IBR, "default" no longer has anything to do with the student's underlying economic situation. </u><br />
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That is, IBR effectively hides the default rate. It makes "default rate" into something that is no longer a useful barometer of the actual economic outcomes of people taking student loans. This is by no means a scientific measurement, but the 80% non-default rate for the class of 1995 leaves one with the impression that college was a successful investment for 80% of those taking loans in 1995. It's a gross, intuitive measurement, but it likely has at least some correlation with actual outcomes.<br />
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Alternatively, IBR pushes the accounting acknowledgement of the loss of money to the program due to lender non-repayment to the 25 year mark when it would presumably be possible to determine the amount of student loan debt forgiven. And here's the big fat stinker - we have $110 B increase in student loans over the last 3 years ($36.6B/year). Based on the current bag economic situation and the increased cost of college relative to earnings, it is highly likely that we will have a default rate greater than 20% - and I will estimate a reasonable value of 50%. That would mean at least about $7B - 18B/year - and that's just for ONE YEAR.<br />
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Additionally, the actual amount forgiven would be considerably higher considering the 7.9% interest rate attached to the loans. (People may or may not want to include the total loan amount because can we really consider losing money that we never had to be a loss? That is, when recognizing loss is our "loss" just the loan capital given or does it also include the interest we never got.) Regardless, we are going to be looking at a big, big loss. However, the loss may not be acknowledged for decades.<br />
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So, the answer to the question "When is a default not a default?" Answer - when it's an IBR.<br />
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Update: Here's <a href="http://www.theatlantic.com/business/archive/2011/08/the-debt-crisis-at-american-colleges/243777/">another article on the debt crisis from The Atlantic</a>. They also draw parallels with the housing bubble.<br />
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Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com10tag:blogger.com,1999:blog-3521318064826848712.post-67074176685765416232011-08-17T15:08:00.001-05:002011-08-18T21:29:15.286-05:00Overvaluing a Law DegreeMatt over at <a href="http://lawschooltuitionbubble.wordpress.com/">The Law School Tuition Bubble</a> does a good job with research and analysis. In a recent post entitled "<a href="http://lawschooltuitionbubble.wordpress.com/2011/08/09/another-day-another-study-overvaluing-law-degrees/">Another Day, Another Study Overvaluing A Law Degree</a>" he reviews a publication entitled "The College Payoff" from Georgetown University's Center on Education and Workforce. Georgetown suggests that with a law degree your lifetime earnings will be 4,032,000 - far in excess of the lifetime earnings of those with a bachelor's degree (2,268,000) and an associate's degree (1,727,000).<br />
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Matt rightly points out that this data suffers from survivorship bias AKA , "the graveyard problem" in that the reported $4M is only for people that actually manage to stay employed as a lawyer for their entire 40 year career - which is only a small percentage of those who graduate law school. This is a really important point to consider because law does not have a lot of job security - <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want_15.html">as I discuss here</a>. My best estimate of those who are initially employed as a lawyer (not just "go to law school", but "employed") and make it through a full 40 years without significant unemployment is considerably less than half.<br />
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Matt also points out that the real premium for earning your law degree is the difference between the bachelor degree's earnings and the law degree's earnings - which works out to 1,764,000 - not the full $4M.<br />
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One additional interesting thing to consider that is not in the analysis is the impact of taxes. Why? Well, the really important number is not how much you "make", but how much you <u>take home</u>. At certain incomes, you basically get to take home 100% of what you earn, but at other incomes the government can take 40%+ of what you earn.<br />
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Let's see how that plays out here. Let's divide the BS and associate's salaries by 40 to figure out their yearly earnings ($56,700 and 43,175). For the legal salary, we have to subtract off the three years spent earning the law degree - this shows up in the chart - so we divide by 37. This gives us $108,973, which agrees closely with the Department of Labor's $110K/year number for average lawyer compensation.<br />
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Now let's see what happens to the take-home pay using <a href="http://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1">this simple tax estimator</a>. Let's use a hypothetical family of 4 - 2 parents and 2 kids - with the standard exemptions and deductions and only one parent working. Old fashioned? Maybe, but feel free to create whatever scenario you want. Here's what we get:<br />
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Yearly Salary Tax Take Home Adjusted Earnings Difference<br />
Associate's 43,175 -1524 44699 (x40) = 1,788,000 +61,000<br />
Bachelor's 56,700 971 55729 (x40) = 2,229,000 -39,000<br />
Law 108,973 10,306 98667 (x37) = 3,651,000 -381,000<br />
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Some things to note:<br />
<ul><li>With the associate's degree, the family pays negative tax due to all the credits in place. The welfare program embedded in our tax code just gives them an extra $1,524/year. If the program continues for all 40 years, that's an extra $61,000 over their careers.</li>
<li>Even with a bachelor's degree, although the family is now paying some tax, it is really not much. They are paying 1.7% of their income as tax.</li>
<li>However, once we get to the law degree, taxes become significant. You can see that we lose almost 10% of our lifetime income to taxes. </li>
<li>Consequently, if we want to see the "true take-home advantage" of the law degree relative to the bachelor's, we need to consider the tax loss and it is already down to 1,422,000 - not the 1,764,000 - a difference of $342,000</li>
<li>To put it another way, of the putative advantage to getting the law degree that Georgetown proposes, <u>about 20% disappears immediately when you factor in the higher taxes</u>. </li>
<li>Some people may see "earnings" and think "take-home". Nope, you have to think about the impact of taxes. Alternatively, people may be familiar with a tax code that that is kind and gentle and either gives you some money or only takes a little. That won't be the case when you practice law.</li>
</ul>Matt mentions some other factors that also eat into the remaining $1,422,000 advantage including loan payments - both principle and interest. Additionally, the loan repayment can be quite costly. For example, if $200K in loans is amortized over 30 years at an interest rate of 6.8%, <a href="http://www.interest.com/mortgage/calculators/15-years-vs-30-years-calculator/">then the total of payments will be $469,387</a>.<br />
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Thus, after taking into account increased taxes and loan repayment, even if you are lucky enough to remain employed for all 37 years as a lawyer, the advantage of the law degree is now only about $953K - that's a far cry from the $1,764,000 that Georgetown was initially trying to tell us - about a 46% decrease. Consequently, I think that it would be legitimate to say that <u>even if you are fortunate to work in law for your entire career, about HALF of the advantage of getting the law degree is eaten up by increased taxes and loan repayment.</u><br />
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People considering law school should really think about that.<br />
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Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com16tag:blogger.com,1999:blog-3521318064826848712.post-3861228030397977952011-08-15T11:31:00.000-05:002011-08-15T11:31:04.553-05:00What Do College Students Really Want - And Can They Get It From Law School? - Part 3In <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want.html">Part 1</a> and <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want_08.html">Part 2</a>, we discussed how most college students really deep down want a personal balance of four things - <u>1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time</u>. But can working as a lawyer really provide these things? <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want_08.html">In Part 2, we took a look at the Money factor</a> and determined that it was unlikely that working as a lawyer would be able to provide the amount of money that most law students expect at this time. But what about the rest of the factors? Let's take a look at Job Security.<br />
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<u></u><span style="font-size: large;">Job Security</span><br />
When most college students consider going to law school, the visualize themselves working as a lawyer for their entire careers to retirement. In their minds, they may become a senior partner or a respected judge - or maybe even an in-house counsel. Additionally, when they determine the payback time for the costs of their degree, they typically use 40 years or so - which is an implicit assumption of job security.<br />
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Some savvy potential law students are able to pierce the law school smokescreen with regard to employment rate and realize that <a href="http://taxprof.typepad.com/taxprof_blog/2011/07/nalp-reports.html">the employment rate at graduation is really only about 50%</a>. However, these students sometimes still decide to go to law school thinking that they will be in the top half of the class and will thus get a job. However, these potential law students typically make the assumption that once they have a legal job it will be theirs for as long as they want it - for all 40 years. Unfortunately, that's just not the case for the overwhelming majority of legal jobs.<br />
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<span style="font-size: large;">First, let's take a look at working at a law firm.</span> How much job security would you say there is in a job where <a href="http://www.axiomlaw.com/sfmagazine/">78% of those hired are no longer with the firm in 5 years?</a> That's even worse than the 50% odds of getting a job in law school. Of course, some of those transfer to other firms (voluntarily or involuntarily) and a small number go in-house. However, a sizable percentage are not able to transfer to another firm or in-house. I can't find good statistics on this, but based on my experiences in practice I would estimate that of those who are no longer working at their firms, at least a third (33%) are out of the game. Of the remainder, maybe 30%-ish go in-house and 40%-ish go to another law firm. Of course, it may not work out at the next law firm (or in-house) either.<br />
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What does "out of the game" mean? Well, it varies. It could be no job at all or it could be leaving the legal field entirely, or it could be being forced to find some sort of piecemeal work that barely keeps your head above water, like being a temporary lawyer or a document review lawyer. <a href="http://thelegaldollar.blogspot.com/2010/01/solo-practice-even-with-spus-help-it.html">Unfortunately, very few associates have the experience, connections, financial backing, clients and reputation to make a successful transition to a solo practice.</a> <br />
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How about once you are a partner? You are part of the lucky 22% who worked for 8-10 years, managed to get some business, and then got "invited" (required) to "buy into the firm" (cough up a lot of money). Well, just being named a partner does not really get you any job security. It's not tenure and its not a guarantee. The other partners can toss you at any time and the political situation in a firm can be tense. Additionally, the buy-in can cost hundreds of thousands to $1M plus. (How would you like to have paid off your loans just to start having to put money aside or take out a loan again? "When do you get to spend it?" you may ask. "That's a good question!" I might say.)<br />
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Additionally, the firm can fold at any time, and the longer you are in the practice the more firms that you will see folding. The biggest example of this for me was <a href="http://en.wikipedia.org/wiki/Brobeck,_Phleger_%26_Harrison">Brobeck, a 900-person CA firm that went from the tops of the charts in compensation to out of business in about 2 years over the dot com crash</a>. This is just one example, but there are<a href="http://thelegaldollar.blogspot.com/2011/03/stability-and-short-memories.html"> lengthy lists of all the large firms that have gone belly up in the last few years</a>. When the firm goes, some lawyers can transition to a new firm, or in house, and some are not able to do so. Percentages vary by type of firm, type of law, location, and economy.<br />
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To be fair, portable clients do represent some job security - clients that are loyal to you and will follow you if you need to set up shop somewhere else or on your own. These are clients that have ongoing legal issues and are going to need continuing representation - and they often don't care about the name of the "firm" that you work for as much as they care about the cost of the bills and their personal trust in you. However, its the clients, not the title or the firm that give you this security. Unfortunately, corporate clients now move their work with regularity these days, especially when a new General Counsel or CEO get hired - and the new guy often has lawyers that he prefers to work with. Your ability to keep that client is really at risk. As an average, I would say that a new CEO or General Counsel - even a new sub-general counsel if the client delegates work in your area - gives you about a 50% chance to keep the business. In this regard I have seen people go from sub-$1M to over $10M - and then back down again - over the course of a few years. When they were hot they got paid a lot, but it is not consistent or secure. <br />
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<span style="font-size: large;">Second, let's take a look at working for a company.</span> Be aware that usually companies are not looking for people just out of law school, but start looking at about year 3+ associates. Companies widely vary about how they view their legal staff - and consequently there is a variance in job security. However, because the firm lawyer usually represents many clients, the loss of one client to the firm lawyer may mean a reduction of income, but typically not complete loss of job. Conversely, the in-house lawyer has only one client - the company - and the loss of that one client means the loss of job.<br />
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Your job would also be at risk during any hierarchy change. New CEO or other top executive? They may have other counsel that they prefer to work with, often from their previous place. You will be told that you should retire or move on. If you are a junior lawyer, the change of CEO is less likely to impact you, but a change in your immediate superior or one above that may still cost you your job. Additionally, a new general counsel may decide to "restructure your department to cut cost to deliver greater value for legal dollars spent." Considering that salaries and legal spend are the main drivers, it's likely someone is going to get the axe. Unfortunately, in the modern "next quarter" world, decisions that save a little money now (even if creating additional cost in the future) are praised. Conversely, something like implementing a company-wide audit of practices to look for and solve legal problems before they become costly does not win praise - even if the long-term benefit to the company would likely be greater. That comes from many companies viewing legal as a cost center instead of a loss prevention center, which is unfortunate - but I digress.<br />
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How many hierarchy changes will you go through in your career? It depends on the company, but once every 5 years seems to be about the average. So, if you go in-house after 5 years as an associate, you are looking at about six serious hurdles to your continued employment assuming your desired 40 year career. What are the odds that you will make it all 40 years? Again it depends on the company and the specific people involved. However, I have seen a new GC come in and fire and replace literally 90% of the legal department in 6 months. It seemed like he was doing it mostly to change the dynamics and make sure people were loyal to him as the boss rather than allowing himself to be vulnerable to previously established dynamics - he wanted things done "his way." It's really pretty common that there will be a significant change. However, even if there is only a 33% chance that you will lose your job with a hierarchy change, you still have to "make that roll" six times to have a 40 year career. What are the odds that you can do it six times? My calculator says that is is about 8%. Even if there were only a 20% chance of getting fired each time, it's still only about 26% chance of you making it to year 40.<br />
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Now, you may not be completely dead if you get fired - you may be able to jump to another in-house position. (Typically, you can't jump to a law firm because you have no clients - and the place that just got rid of you is probably not going to send you work.) However, there are a significant number of in-house counsel that experience unemployment - or are unemployed for a long time - after leaving a position, and it usually gets worse the higher up the chain you go. For example, for a high-ranking lawyer, spending a year or two out of work would not be uncommon. This would certainly impact your savings and would also impact the "payback math" for earning the law degree.<br />
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<span style="font-size: large;">Now, let's take a look at government work.</span> The stability of government work seems to vary by the type of work. Just like different companies may provide different stability opportunities, different government positions may also. On one end, you could be working for the <a href="http://lernerveit.com/2011/07/18/%E2%80%9Cthe-civil-justice-system-in-san-francisco-is-collapsing%E2%80%9D/">civil justice system in San Francisco that will be down to 280 workers of its 591 authorized positions after layoffs</a> (53% gone). On the other end, you could be a federal judge who can't be fired or have a salary reduction during good behavior. Of course, in terms of numbers, there are very, very few federal judges (<a href="http://en.wikipedia.org/wiki/United_States_federal_judge">only about 3,500</a> - compare with about 1.75M people completing law school in the last 30 years). Additionally, a federal judgeship today often seems to require extensive experience at a good law firm as well as substantial fundraising activity for whatever party you think will agree to have their President nominate you for a judgeship (often there may be a personal fundraising expectation). State judges may be appointed or may be elected. If elected, note that fundraising and that re-elections will take place. If appointed, note fundraising.<br />
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How about working for a government agency? Well, now you are kind of like an in-house attorney. Two big thing that impacts your job security are 1) whether you are covered by a union, and 2) how your agency is funded. Obviously, if you are covered by a union and pay your union dues (an additional expense - view it as "job insurance"), then your job security is greater. However, there aren't that many legal positions that are union-eligible. Second, the funding source for the agency is important - Federal is usually the best, followed by state and city, but some cities are better funded and run than some states. <br />
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Overall, in the absence of a serious financial shortfall like San Francisco, government work on average probably provides the most job security of the three options that we are looking at. However, it is also typically the lowest paid. Consequently, the payback math for the value of the law degree may be questionable.<br />
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<span style="font-size: large;">Job Security In Law As Compared To Other Fields</span><br />
As I was writing this, I realized that I should clarify that it's not a binary determination as to whether a career has "Job Stability" or not. Instead Job Stability is a continuum and the stability of a job in law should be viewed as compared to other careers. However, one of the main points that I want to deliver is that the law student fantasy of lifetime job stability by getting a law degree is pretty much a complete fabrication.<br />
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What's the job security like in law as compared to other jobs? Well, I don't have hard data, but it's pretty clear that it's less than the average for cops (strong union), less than nurses and doctors (high demand, maybe union), less than elementary and high school teachers (union again), less than engineers, etc. Conversely, the job security in law is probably greater than that of the average entrepreneur or salespeople (keep in mind that as a partner in a law firm you actually ARE an entrepreneur and salesperson). <br />
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Another thing to consider in your personal calculus if you are determining whether to go to law school is that depending on your previous education or career, the law degree may raise or lower your job security. For example, if you are a cop considering going to law school because you see high lawyer salaries, consider that you will be losing a very significant amount of job security - the consideration also should take place for the other careers named above.<br />
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Bottom line, the level of Job Stability that most law or pre-law students think will be theirs with the earning of the law degree is typically not in accordance with reality. (Whether law students get this inaccurate impression from law school marketing and whether it is morally and/or legally ethical to market in that way, I leave to another post). Finally, if I am in conversation with a law student and the subject of job stability is raised and the law student responds with "Hey, we will always need lawyers, right?" I reserve the right to a resigned sigh and just shaking my head.<br />
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Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com6tag:blogger.com,1999:blog-3521318064826848712.post-57594898654274912652011-08-12T19:26:00.001-05:002011-08-17T15:09:11.196-05:00A Tier 1 Law Professor Admits Law Schools Are Scamming StudentsAs reported by AboveTheLaw and appearing on <a href="http://insidethelawschoolscam.blogspot.com/">InsideTheLawSchoolScam</a> a Tier 1 Law Professor has decided to rise to the highest of ethical standards (you know, the kind that law schools are supposed to teach and abide by) and <a href="http://abovethelaw.com/2011/08/a-tenured-top-tier-law-professor-joins-the-ranks-of-the-scambloggers/">A Tier 1 Law Professor Admits Law Schools Are Scamming Students.</a><br />
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The Professor has about eight posts so far - and man are they good. He really comes out swinging. Let's look at them below.<br />
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<a name='more'></a>Here's a quote from his first post - <a href="http://insidethelawschoolscam.blogspot.com/2011/08/welcome-to-my-nightmare.html">Welcome to my nightmare</a> Emphasis added by me.<br />
<blockquote>In the end, the fact that law professors don't intend to scam their students is irrelevant. <u>We are scamming them, or many of them, and we know we are </u>-- <u>or we would know if we paid any attention at all to the current relationship between legal academia, legal practice, and the socio-economic system in general, which naturally is why so many of us avoid doing so at all costs.</u></blockquote><br />
He then talks about law school teaching and confirms what many of us suspected during our law school years and were then able to confirm once we were practicing attorneys and talked to law professors - <a href="http://insidethelawschoolscam.blogspot.com/2011/08/fake-it-till-you-make-it-law-school.html">most (not all, but most) law school professors don't know what they are talking about.</a><br />
<blockquote>It takes just a few probing questions from the cleverer and less cowed to reveal that the typical law professor’s knowledge of the subject matter he’s teaching is a mile wide and an inch deep. Sure, he’s good enough (maybe) at faking that he knows what he’s talking about in regard to X – even when X is actually a giant sprawling mass of often contradictory and incoherent material covering a vast range of subjects that touch on dozens of areas of expert knowledge that have kept armies of social scientists and other real academics busy for their entire careers . </blockquote> Here are a couple more great quotes:<br />
<blockquote> Consider the sheer absurdity, for example, of a professor “knowing” the “law of Property.” <u>The only reason such a preposterous hypothetical is even momentarily plausible is because law professors are good at using their social authority to reduce “the law of Property” to something as intellectually impoverished and practically useless as the various Restatements of Property etc. </u></blockquote><blockquote>Law school faculties are full of “academic lawyers” who are neither academics nor lawyers. <u> This guarantees that most of your classes will be a complete waste of time. </u></blockquote><br />
Amen, brother. <br />
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Then the professor takes on the vapid wasteland that is called <a href="http://insidethelawschoolscam.blogspot.com/2011/08/legal-scholarship-part-i.html">Legal Scholarship</a> - and SHREDs it. And then <a href="http://insidethelawschoolscam.blogspot.com/2011/08/legal-scholarship-part-ii.html">shreds it some more.</a> The prof points out that <a href="http://insidethelawschoolscam.blogspot.com/2011/08/would-you-pay-100000-for-law-review.html">each law review article costs about $100,000 of tuition dollars</a> to the law school - and adds very, very little value to the law students that are forced to pay for it.<br />
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For those who may have wondered whether the Law Professor really is a law professor, the professor's identity was <a href="http://www.insidehighered.com/news/2011/08/09/tenured_law_professor_aims_to_expose_the_excesses_of_his_profession">verified by Inside Higher Ed at this post.</a> Additionally, you can read an <a href="http://www.constitutionaldaily.com/index.php?option=com_content&view=article&id=987:behind-inside-the-law-school-scam&catid=44:news&Itemid=65">interview with the Law Professor here on Constitutional Daily.</a>Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com5tag:blogger.com,1999:blog-3521318064826848712.post-29239182661588750162011-08-12T18:07:00.000-05:002011-08-12T18:07:35.311-05:00The New Data That The ABA Is Asking For Is Good, But Not Great.<br />
I previously <a href="http://www.blogger.com/">discussed this here</a>. Also, <a href="http://www.thefacultylounge.org/2011/08/aba-nalp-and-transparency-on-jobs.html">here's a new and even more in-depth article outlining some of the loopholes to watch out for/additional data that should be required from law schools.</a>Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com0tag:blogger.com,1999:blog-3521318064826848712.post-36620101874993661932011-08-12T18:04:00.001-05:002011-08-12T18:05:00.009-05:00NALP Objects To The New ABA Employment Data Rules, But Then Makes UpFirst, the <a href="http://www.abajournal.com/news/article/aba_data_collection_plan_riles_nalp/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email">NALP was riled </a>by the <a href="http://www.abajournal.com/news/article/abas_legal_ed_section_approves_questionnaire_changes/">ABA plan to collect better employment date for law students</a> because it seemed to be cutting NALP out of the loop - NALP even threatened to sue the ABA. NALP obviously felt threatened because the ABA now wanted employment data reported directly to the ABA rather than to NALP - effectively cutting NALP out of the loop. However, <a href="http://www.abajournal.com/news/article/aba_and_nalp_renew_collaboration_efforts_at_aba_annual_meeting/">they then agreed to work together.</a>Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com1tag:blogger.com,1999:blog-3521318064826848712.post-86695150451360338482011-08-12T18:03:00.001-05:002011-08-12T18:05:39.824-05:00Cooley and NYLS Get Sued<a href="http://abovethelaw.com/2011/08/cooley-law-gets-served-some-of-its-own-medicine-nyls-is-tardy-to-the-party/">Cooley and NYLS got sued</a><br />
This brings the total number of law schools that have been sued to three including <a href="http://abovethelaw.com/2011/07/thomas-jefferson-school-of-law-is-the-answer-worse-than-the-allegations/">Thomas Jefferson School of Law</a>. At issue is whether the law schools concealed or misrepresented their employment numbers in order to induce students to pay them tuition. I am not involved in the cases, but the contentions echo those I have heard repeated often. Regardless of whether the allegations are true, the fact that a law school can now be sued over such matters must now be impacting on the consciousness of many law school Deans and Professors.<br />
<a href="http://news.yahoo.com/graduates-accuse-law-schools-scamming-students-021529890.html;_ylt=Ag3J_jOrL0ZI3AmFbvqXdJptzwcF;_ylu=X3oDMTNha2J0a25mBHBrZwNmY2UxZjE4OS02YjQ2LTMzMzQtYWJhNC1hMzk3ZjYwZTY5NmQEcG9zAzUEc2VjA3RvcF9zdG9yeV9jb2tlBHZlcgMyYTc5M2FjMC1jM2MwLTExZTAtYjNhYy0yNWJkOWE1YjVjYjg-;_ylg=X3oDMTJybDAyMHVsBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDODBkYmZmMGMtYmVjZC0zMjJhLThhY2QtNjE2YmZkZDIyOTM3BHBzdGNhdAN1cwRwdANzdG9yeXBhZ2UEdGVzdAM-;_ylv=3">More coverage.</a> <a href="http://restoringdignitytothelaw.blogspot.com/2011/08/kurzon-strauss-files-suits-against.html">Even more coverage.</a><br />
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Also - there have been a lot of developments lately, so I am going to do a bunch of little posts. Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com0tag:blogger.com,1999:blog-3521318064826848712.post-19515804517424739842011-08-08T10:52:00.000-05:002011-08-08T10:52:21.201-05:00What Do College Students Really Want - And Can They Get It From Law School? - Part 2In <a href="http://thelegaldollar.blogspot.com/2011/08/what-do-college-students-really-want.html">the previous post</a>, we discussed how most college students really deep down want a personal balance of four things - <u>1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time</u>. College students often become potential law students when they come to the belief that "working as a lawyer" is a way to achieve these four factors - and law school is the modality to obtain the state of "working as a lawyer." However, the potential law student's evaluation of the balance of the four factors is often flawed because they are typically only able to get solid data with regard to the Money factor and the students often fill in self-serving "soft data" for the rest of the factors to justify the hard data Money analysis. We are going to take a look at each of the four factors that students really want and then compare them to what law school and a career as a lawyer can actually provide at this time. In this post, we will look at the Money factor.<br />
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<a name='more'></a>First, the discussion below is going to be in terms of law school and a career as a lawyer NOW. Not 5, 10, or 25 years ago. It's not relevant that you are a senior attorney and have enjoyed your career. Your law school and legal career experience will not be anywhere close to that a person considering law school today will go through. The supply and demand is mismatched more than it has ever been (See NALP) and law school costs more in real dollar terms than at any time in history - typically several multiples more.<br />
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Now let's look at the first factor:<br />
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<span style="font-size: large;">1) Money</span><br />
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There are some people who go to law school and get high-paying offers - however, <a href="http://thelegaldollar.blogspot.com/2011/08/new-associate-hiring-2010-survey-and.html">it's really only about 5% of law students</a>, and a number of those are going to be due to family connections. A one-in-20 "bet-your-life" chance is not very good odds. Some law students object to this being portrayed as pure statistics and believe that they will be one of the ones that will be in the 5% because they are so darn good. Ummm... sorry, but 100% of the potential law students think that about themselves and there is really nothing special about you, pumpkin. <br />
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According to <a href="http://taxprof.typepad.com/taxprof_blog/2011/07/nalp-reports.html">NALP, the average salary of all law school graduates who reported full-time employment was $63K - however, only about 50% were employed full time.</a> (You may notice that this number differs from the "employment rates" reported by law schools. That's because they count part-time and temporary employees in their numbers - they "massage" them or "lie".) Consequently, if we just want to look at the statistics, your risk-adjusted salary after law school is $63K*50%=<u>$31.5K/year</u>. You will be paying in $200K and your risk-adjusted outcome is pretty bad. It's probably a <u>decrease</u> from your risk-adjusted salary for most college majors.<br />
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Also, most of the 5% of high-paying jobs go to those with a corporate or IP background. If you don't have such a background, then your odds are even worse.<br />
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Further, even if you start making good money, there is no guarantee that it will continue - associates get fired or burn out, firms dissolve, the legal market itself may change.<br />
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If you are not already wealthy, then law school will cost you $200K - at an interest rate of maybe 8% once you consider federal and private loans. That means that you will have to pay $16K each year in interest before you even touch principle. Also - because you make $160K, your combined federal and state tax rate will be high - let's say 35-40%. That means you need $23-24K in pre-tax income each year just to pay THE INTEREST on your loans. Suddenly your big salary does not look so high any more.<br />
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In fact, even for the associates who end up in the top 5%, it often becomes a race between whether they will be able to pay off their students loans or "burn out" first. Considering that it will take about 8 years to pay off the $200K in loans and 50-66% of new associates leave their law firms by then, even most of the "winning 5%" don't actually end up winning.<br />
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I know that sometimes astronomical salaries are reported for some law firm partners. I know that they excite your greed and you think that you will achieve the same salary. However, you really have to consider the odds. According to the ABA, there are about 1.1M lawyers practicing in the country today - or about 800K according to the Department of Labor (DOL). Further, according to the DOL, in May 2008 the median annual wage for lawyers was $110,590. Further, the middle half of the occupation earned between $74,980 and $163,320.<br />
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That means that 75% of all practicing lawyers make less than $163K/year. Keep in mind this includes those who may have been practicing for decades. Also keep in mind survivorship bias - those who could not make a living at law have dropped out of the distribution and only the top earners remain.<br />
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So where do those astronomical salaries come from? Well, in some cases they were never there to begin with. That is, I have seen lists that purport to show "profits per partner (PPP)" with the implication that the PPP is what the partners take home. However, for some lists, the PPP is actually just the total firm revenue divided by the number of partners. That's not a very helpful metric because it doesn't take into account rent, associate salaries, staff salaries, and a whole bunch of other costs. Frankly, even an extremely high $1.5M in firm revenue per partner may translate into median partner take-home in the $300-$400K range. That's still a lot of money, but it's "comfortable life in the suburbs" money, not "sail my yacht around the world" money.<br />
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Another thing to consider is the difference between average partner compensation and median partner compensation. At most firms, there are a small number of super-rainmakers that produce the bulk of the firm's billings. These guys are super-salesmen and have usually also gotten really lucky as well. In a law firm, when you bring in work, everyone who works on your work has a percentage of their billings directed to you. Consequently, these super-rainmakers do real well. However, their compensation is by no means reflective of the median partner compensation.<br />
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For example, <a href="http://online.wsj.com/article/SB10001424052748704570104576124232780067002.html">according to this article, the average partner in a large law firm in the US makes $640K/year</a>. However, that's the average, not the median. Based on my knowledge of several firms, this average is skewed considerably higher by the presence of the few super-rainmakers. In reality, I would say that the median salary for a partner in a large law firm is probably in the $300-$400K range averaged over the US. (Obviously high-cost areas like NY will be a little higher, but probably not more than $500K on average - and it will be more than eaten up by the higher cost of living.) That's still a lot of money, but after 40% to taxes, even $400K becomes $240K - not millions.<br />
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Out of the 1.1M lawyers that the ABA reports, I would be very, very surprised if more than 1% brought home $1M or more (about 11,000 lawyers). Actually, I would be more comfortable with an estimate of 0.5% (about 5,500 lawyers). 5500 - out of 1.1M practicing - or maybe 1.75M that went to law school. Vanishingly small odds. The rest of it is just "salary porn" and really does not reflect reality.<br />
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<span style="font-size: large;">The bottom line is - law school is not going to provide you with the money that you fantasize it will. </span><br />
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<span style="font-size: x-large;">So what do you do instead? </span><br />
Well, that's really going to depend on you. You remember how I mentioned in the first article that people get too hung up on the money metric and ignore their other 3 factors? Well, you really need to take some time out and evaluate your strengths and what is going to be a good fit. Every person has their own strengths and weaknesses - and their own balance. That being said, here are some things that some people I have met should have done rather than go to law school: <br />
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<a href="http://www.blogger.com/"><span style="font-size: large;">1) Get an engineering degree/go to engineering grad school/stay working in engineering</span></a><br />
Why? No 200K in loans, grad school is often free, hiring percentages are much greater than law school, and the lifestyle is a lot easier. In fact, you may very well have a higher net worth over your career as an engineer than a lawyer. Figure a 40 year career - the engineer is earning for the first 3 years while the lawyer is just accumulating debt. At the lawyer's graduation, the engineer has been saving for 3 years while the lawyer (even if lucky enough to find a job) has $200K in debt. Also keep in mind that the average starting engineering salary is around 60-70K with 90%-ish employment while the average law school starting salary is $63K with 50% employment. I am not saying that engineers never have a hard time finding a job, but the odds are a lot better than law school. <br />
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Frankly, the average lawyer will likely never catch the average engineer in terms of net worth. Further, the average 1 in 20 "winning" lawyer who gets that 160K will probably not catch up to the engineer's net worth for 10 years or more. A three year head start, no 200K in debt, and less taxes are very powerful. Keep in mind also that 50%-66% of "winners" drop out before year 8. Consequently, even most of those who "win" at law school end up losing to the engineer.<br />
<a href="http://www.blogger.com/goog_472989160"><br />
</a><br />
<a href="http://www.bls.gov/oco/ocos074.htm"><span style="font-size: large;">2) Go to medical school</span></a><br />
There is even more debt and a longer learning time, but the AMA manages the supply and demand better - you don't have 50% of new doctors being unemployed. Compared to the engineer, the doctor is likely to have an even longer catch-up time, figure 15-20 years, but placement seems to be a lot better for doctors. Sure, there are a large percentage that transition out of trauma, but they usually don't have to transition out of the practice entirely. Also, there are certainly unemployed doctors, but again we are going with the odds.<br />
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According to the DOL (that gave us the statistics above that the median wage for lawyers was $110,590), the median wage for physicians practicing primary care is $186,044, and physicians practicing in medical specialties earned total median annual compensation of $339,738. Employment is also expected to grow "much faster than the average" for doctors - as compared to "competition will be keen" for lawyers.<br />
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<span style="font-size: large;">3) Go for business, especially finance and accounting</span><br />
Accounting has a reputation of being dull - and it sometimes is at the low levels. However, that's good for accountants because 1) it keeps people out of the major so the supply and demand is better, and 2) you can't really be a CFO without an accounting (or finance) degree - and there are a LOT of companies needing CFOs. Being a CFO is not usually thought of as dull by college students, but somehow the accounting degree that enables the person to be the CFO is thought to be dull and lead to only a dull life.<br />
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Finance is also good. If for nothing else, it may teach you the ridiculousness of spending $200K to achieve an outcome that gives you on average a salary of $31.5K/year. <br />
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<span style="font-size: large;">4) If still in undergrad, make course corrections</span><br />
It's time to re-think the english, ploy-sci, or psychology degree. Look to engineering, bio/chem pre-med, or business - especially finance or accounting. "But I don't like math - Waahhh!" Well, then get used to not making much and having few opportunities. You are making decisions that are going to impact your life here. I would advise you to move away from "playtime", "doing what I love", "but basketry is my passion" - at least as a career. They make fine hobbies. Instead, focus more on what skills you want to have that you can put to use for the long term without going crazy and that people will pay you for.<br />
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If you have to, take an extra year or two of undergrad to graduate with a valuable degree. The cost of the extra year or two will be much less than the cost of you trying to make your non-marketable degree into something of value by going to law school or something else. There's no prize for finishing two years early with a worthless degree.<br />
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<span style="font-size: large;">5) If employed, consider incremental changes instead</span><br />
Recognize that the average outcome for law school is pretty bad. Further, even the "winning" 5% often don't win long-term. Further, even if they make partner, they usually don't pull down the numbers that are reported. Some do, but a vanishingly small percentage. <br />
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I can understand the dissatisfaction that can creep in from the day-to-day grind and how your wanting to "just break out" may lead you to put more positive emotional weight into the potential of going to law school. However, I would recommend a safer, more incremental transition. Additionally, incremental transitions often pay you back with relatively little cost and risk. For example, your employer may be willing to pay for more training. Alternatively, most companies will allow you to take on an additional role that may lead to you transitioning into that role. <br />
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For example, if you like the money aspect of law, then maybe try to start working with your company's sales team. Frankly, even if you went to law school, you won't make the big bucks unless you are a sales superstar. If you find you don't like sales, then you can cross big firm partner off of your list. If you do like sales, then you may be able to make more in sales than you actually would by going to law school.<br />
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In the next posts, we will take a look at the other three factors.<br />
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Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com5tag:blogger.com,1999:blog-3521318064826848712.post-13837242655146740302011-08-04T11:28:00.000-05:002011-08-04T11:28:49.872-05:00What Do College Students Really Want - And Can They Get It From Law School? - Part 1When I talk to people considering going to law school, I usually try to figure out what they really want from it. Not the BS, surface reasons like - "law is my passion" (<a href="http://www.youtube.com/watch?v=xD4RiHe7gHE">really? REALLY?</a>) or "I like to help people" (you don't need to spend $200K to do that - get any job at a charity, you will probably be better off than going to law school) - but <u>the real reasons</u>. The deep down reasons. The reasons that aren't so nice or so PC. The reasons that they don't even want to admit to themselves - because it is only through the filter of their conscious minds that they can rectify their unconscious need for that they really want with what they have been told (or told themselves) is appropriate. The reasons that they have been taught that (although true and accurate in the purest sense) will bring condemnation from society if spoken frankly.<br />
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In short, I try to get a glimpse of who they really are and what they really want. For a few, they are a good match for law school - but most of the others often want something that law school - or even a law career - can't provide. Let's take a look at the most common things that the people that I meet <u>really want</u> - and whether they can get it from law school.<br />
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<a name='more'></a>First, people that did not graduate in the lat 5 years need to recognize that the competition in colleges has greatly increased. That means that not only did the competition itself evolve, but the people competing have had to evolve and the impact of the increased competition on them gives them a different experience - which in turn impacts their world view. Imagine you are a college student today that has managed to fight your way into a top college. (Let's limit our consideration to top colleges - virtually anyone can get into some "college" today and the value of a "college degree" has been very much diluted.) Competition today is really fierce, and unyielding at top colleges - the students that have won the competition and gain entry and are doing well have usually been single-mindedly focused on their goal of getting good grades for years upon years. Consequently, let's look past all the "leaning is my passion" BS that some people expect the students to spout - frankly, "enjoyment" or "passion" would only have gotten the students so far (and not far enough to out-do the competition) and the rest is single-minded determination, absolute focus, the ability to delay gratification, and maybe desire for or fear about the future - or a combination of the two.<br />
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As this college student, you recognize that you have assets of intelligence and the ability to do work and you want to exploit those assets in the most reliable and effective way to achieve your goals - although you may have trouble explaining exactly what you want and may even feel a little guilty or mercenary to explain it that way. However, you haven't put in all this ginding, painful work over the last several years and passed up so many fun opportunities to let your work go to waste - you want to get as much out of it as you can. So what do you really want?<br />
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Well, you want <u>money</u> - lots of it. (You probably have been taught that it is impolite to phrase it as "lots", but you definitely want to have more than the average US worker's $40K - so you really do want "lots".) Money represents freedom and power and pleasure. With money you can have stuff that you want, live with less worries, and generally make your life easier. Also, although you may or may not realize it, you also want <u>job security</u> - the ability to <u>consistently</u> earn money year after year for as along as you want to earn it. In addition, you want to do <u>a job that doesn't suck</u> - but you recognize that work is work - in fact you anticipate that work will be much like going to school has been for you in that 1) you will be given a series of highly regulated and overseen tasks to do, but 2) you will get to pick the general subject/career that those tasks will be in. Also, you may not realize it yet, but you also want <u>time</u> - sometimes called "work/life balance" - time to go on vacations once or twice a year, time to take off a couple weeks when your child is born, time on the week nights and week ends to be with family, socialize, or just vegetate. I will shorten these to: <u>1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time</u>. (There are other aspects that I frequently see people wanting, but these four are pretty much universal.)<br />
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So you look around and you try to identify a modality to allow you to most effectively exploit your assets to achieve your goals. However, although some metrics are fairly easy to come by (such as average starting salaries which inform you about the "Money" metric) other metrics are not transparent at all or are very vulnerable to subjective interpretation or misinformation.<br />
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For example, if you consider a "good work/life balance" to be one in which you are home at 6pm, don't work on weekends, and can take two weeks off/year - and you hear a potential employer pitching their "great work/life balance", you may assume that the employer and yourself share the same vision of "great work/life balance". Instead, their idea of a "great work/life balance" is you working until 9pm on weekdays, spending 6 hours on e-mail both on Saturday and Sunday and either not taking vacation or taking "vacation" where you are logged in to e-mail and available for 6-8 hours/day. Consequently, you have a hard time getting good, solid data about the "free time" aspect - you may think you have good data, but you are often deceiving yourself.<br />
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Also, the "Appealing Job" metric is pretty hard to get a handle on. You don't really know what it is going to be like to work in a specific job - especially one that you will be doing for year-after-year once the novelty has worn off. You can get a better idea by interning or doing a co-op, but they may be hard to come by and really only show you a brief glimpse of a job- not how the understanding of your job will change over time, how you will come to view your job over time, or how your responsibilities and tasks will change over time.<br />
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Similarly, the "Job Security" metric is tough to evaluate - it is really asking you to look into the future, maybe up to 40 years in the future when you are in your 60s. That's very tough to do under any conditions. It is especially tough to do when you have not even started working at a specific job and don't have a few years under your belt to get a sense of where the industry - and your company - are going.<br />
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So you default to Money as a metric. Here you can get a wealth of statistics that (at least at first glance) seem reliable. However, you really do have 4 goals that you would like to maximize. Unfortunately, in the absence of clear metrics for three of those goals, you are unable to develop a plan that maximizes the combination of the 4 goals. Instead, you find yourself defaulting to a plan that maximizes the metric for which you have data - Money. You can tell which options seem to make the most money - and you subtly diminish the remaining factors by filling in "soft" data in the absence of hard metrics. For example, instead of hard data with regard to job security of lawyers, you might say to yourself "we will always need layers, right?" or "there have always been lawyers and always will be, right?" or "you can do anything with a law degree". Further, in the absence of hard data about the day-to-day work of a lawyer (or in response to misinformation provided in sales pitches by law school recruiters) you may fill in the Appealing Job metric by saying to yourself "lawyers are a very respected profession" or "lawyers get to work on interesting things", etc.<br />
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If you are that college student, then I urge you to <u>be selfish and to be smart</u>. (Sounds strange, doesn't it?) Selfish because it is really your own life and you need to decide what is best for you - only you can arrive at the balance of the four factors that will work for you - and will work for you not just for a month or a year, but for a decade or more. Take some time to think and identify what you really want from the working world. Identify how YOU want to balance the four factors. Also, stick to your guns! If you decide that you want to be able to have evenings free, then stick to it! Don't be persuaded to give up your evenings for a little more money - not because of any moral "good", but because it just is not going to be effective for you in the long run.<br />
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That is, you might think that having that little extra money may make you happier - money makes people happy, right? To an extent it does, but there is a point of diminishing returns - and it is not a specific dollar amount. Instead, everyone has a balance of the 4 factors that works for them - and each factor (and the balance) is different for all of us. However, if you don't know yourself - if you transgress from your personal balance - for example by sacrificing Free Time for Money beyond the extent to which you are internally prepared to sacrifice it, you will find that the additional money really does not have the positive impact that you expected (and that could happen at $30K or at $200K, depending on your personal aspects). <br />
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What brought this on is that I have interacted with literally 20-30 undergrads in the last year who have come to me saying that they "want to go to law school." However, <u>when we really dig into what they really want it turns out to be the four factors outlined above</u>, and law school is the modality that they believe will allow them to achieve them. However, law school and a career as a lawyer typically does not match with the actual personal balance of the four factors that the potential law student has. In the next post, I'll take a look at each of the four factors, compare them to what the students typically really want, and then compare them to what law school can actually provide.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com9tag:blogger.com,1999:blog-3521318064826848712.post-17328711894679197592011-08-02T15:31:00.000-05:002011-08-02T15:31:34.217-05:00No More Subsidized Stafford Loans - Debt BillI just wanted to call attention to this aspect that was part of the Debt Ceiling Bill that has now been signed into law - and <a href="http://abovethelaw.com/2011/08/debt-ceiling-deal-includes-last-second-screwing-of-graduate-students/">as reported by AboveTheLaw</a> - <u>no more subsidized interest for grad student loans after July 2012</u>.<br />
For law students, the big one here is probably the Subsidized Stafford Loan - which usually makes up $8,500/year of the typical loan package. You used to have the interest subsidized while you were in school - and for 6 months afterword. Now the interest subsidization is gone, gone gone.<br />
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What's the impact going to be on law students? Well, <a href="http://www.michigan.gov/mistudentaid/0,1607,7-128-38170_38171-129849--,00.html">the Stafford Loan rate is currently 6.8%</a>, and loan disbursements take place at the start of the year. Consequently, by the September after graduation, the accumulated principal and interest would be: 8.5K *(1.068)^3 + 8.5K *(1.068)^2 + 8.5K *(1.068) = 10355+9695+9078= $29,128. Subtracting out the $25,500 in principle, we get $3,628<br />
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<u><span style="font-size: x-large;">Consequently, for almost all students, law school just got $3,628 more expensive.</span></u><br />
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Here's another thing that is interesting and illustrates the declining support for education in the U.S. (before the subsidized interest loan was eliminated) the $8,500 limit had remained unchanged since at least 1995 - I still remember $8,500 being my subsidized amount at that time. This is in spite of the cost of going to law school literally TRIPLING (taking inflation into account) over that time period. Thus, the subsidized part has become a lesser and lesser percentage of the loan burden over that time.<br />
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If it wasn't already apparent, going to law school AT THIS TIME is a <u>truly rotten deal for almost all law students</u>. <a href="http://thelegaldollar.blogspot.com/2011/08/new-associate-hiring-2010-survey-and.html">Only about 1 in 20 really make it work.</a> It used to be a pretty decent deal, but the economics of the situation have truly changed. It may change back some day, but it won't for at least several years.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com7tag:blogger.com,1999:blog-3521318064826848712.post-2739722594441140862011-08-01T13:17:00.000-05:002011-08-01T13:17:18.464-05:00New Associate Hiring - 2010 Survey and 2011 ProjectionAmerican Lawyer is now confirming what just about everyone already knew -<a href="http://www.law.com/jsp/tal/PubArticleTAL.jsp?id=1202508602170&Job_Offers_to_Summer_Associates_Down_by_OneThird_in_"> job offers for summer associates were way down in 2010 as compared to 2009 (about 33%)</a>. American Lawyer bases this on the results reported from the 59 firms that participate in their Summer Hiring Survey. Let's dig into the 2010 numbers and also make a projection of what the 2011 summer associate offer rate will be.<br />
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<a name='more'></a>In real numbers, those 59 firms made 888 fewer offers in 2010 - 1,791 as compared to 2,679. Keep in mind that the <a href="http://en.wikipedia.org/wiki/Law_school_in_the_United_States#Post_graduation_employment">total output of all law students per year is about 44,000</a> - so this represents a significant proportion of all law students. <br />
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<br />
<a href="http://www.blogger.com/"><span id="goog_1274335136"></span>According to NALP</a><span id="goog_1274335137"></span>, only 8% of the reporting lawyers (not necessarily all lawyers) report a salary of $160K (in previous years). Let's use that 8% as an upper limit on the number that could possibly be making $160K. If we just take the 2,679 offers that were made in the surveyed firms divided by the 44,000 total graduates, then we find that those offers represent 6.1% - which seems fairly close to 8%. However, we know that not ALL firms appear in the survey (although non-appearing firms might be more likely to have decreased hiring and not want to create bad press by reporting it). Of the firms that DO appear on the survey, they are pretty much the $160K firms. We also know that the NALP numbers are typically overly-rosy because law students with a positive outcome are often encouraged to respond and those with a negative outcome are sometimes discouraged from responding.<br />
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Regardless, using the most optimistic numbers, we can find the "most optimistic estimate". Consequently, we take the NALP's 8% of students at $160K and scale it by the survey's 33% decrease to arrive at a<u> "most optimistic estimate" of about 5.25% of law students making $160K.</u><br />
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Yikes. That's 1-in-20 odds. We also know that the distribution of salaries is bi-modal, so that if law graduates don't make the big money, then they are likely only making about $55K/year - if they can even find a job. (According to NALP, only about 40% of graduates were employed as full time, non-temporary attorneys in the 2010 class.) <br />
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So to put that in easy-to-understand language: Law school = 1/20 "win!", 7/20 "meh", and 12/20 "ouch!" or "epic fail". For someone considering law school, recognize that 1-in-20 odds are terrible odds on which to base your future. You would be better off in Vegas. At least if you lose there you can declare bankruptcy and discharge the debt.<br />
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Here's the big question - what will the total number of permanent offers be like in 2011? I have seen <a href="http://thelegaldollar.blogspot.com/2011/02/tiny-green-shoots-in-legal-hiring.html">preliminary data that indicates that the number of summer associates is up by about 8% in 2011</a> from 2010 (that would still be down 28% from 2009). I also note that the 59 firms in the survey report offer rates of about 90% and that offer rate has remained relatively stable. Consequently, I would look for the number of permanent offers to be up in the 5%-10% range in 2011 as compared to 2010. <br />
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PLEASE NOTE - that will still be a decrease of about 25%-30% from 2009. Unfortunately, for people trying to talk gullible/overly-optimistic pre-law students out of a decision that is likely to negatively impact their lives (see odds above), I would be prepared for a raft of articles screaming about how "hiring is up for lawyers!" in 2011. As I have mentioned before, for those trying to "sell" law school, it's <a href="http://thelegaldollar.blogspot.com/2011/07/everything-sunny-all-time-always.html">"Everything Sunny All The Time Always!" </a>Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com0tag:blogger.com,1999:blog-3521318064826848712.post-80334882408369484072011-08-01T11:10:00.000-05:002011-08-01T11:10:14.463-05:00Best and Worst States To Make A Living<a href="http://www.money-rates.com/">MoneyRates</a> has a pair of interesting articles - <a href="http://www.money-rates.com/news/10-best-states-for-making-a-living.htm">the 10 best states to make a living</a> - and - <a href="http://www.money-rates.com/news/10-worst-states-for-making-a-living.htm">the 10 worst states to make a living.</a> To calculate the lists, they took into account the following and then calculated an adjusted-average income for each state:<br />
<ul><li>Average state wages</li>
<li>State unemployment rate</li>
<li>State tax rate</li>
<li>State cost of living</li>
</ul>Guess which state is the best to make a living?<br />
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<a name='more'></a>It's ILLINOIS - with an adjusted-average income of $41,986.51. It is no surprise to me that Illinois was in the top 10. I grew up in Illinois and then spent three years in Boston for law school. It was a real eye-opener as to the relative tax rates and cost of living between the two places. According to <a href="http://www.bestplaces.net/col/?salary=160000&city1=51714000&city2=52507000">this site</a>, Boston is 45% more expensive than Chicago and the cost of housing is 92% more expensive in Boston. Further, just for comparison, a salary of $160K in Chicago is equivalent to $232K in Boston - and a salary of $160K in Boston is the same as $110K in Chicago. Frankly, as far as the expenses go, it was like moving to a new (and much more expensive) country. Based on this experience, I made sure to consider the cost of living adjusted salary when I was deciding where to practice - and I choose Illinois. However, Illinois is probably not going to be #1 next year - they just raised the state income tax from 3% to 5%.<br />
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Texas, Virginia, and Delaware at numbers 3, 4, and 5 were also no surprise. They traditionally have low taxes and relatively lower costs of living. One thing that I WAS surprised by was to find Massachusetts at #6 - at $38,664. However, the article notes that "the high cost of living in Massachusetts is counterbalanced by the highest average wage levels of any state." MA's $38,664 is not that much less than IL's $41,986 - so it will be interesting to see what happens next year when the IL tax increase is factored in. The final surprise was the absence of states traditionally regarded as low-tax states like New Hampshire and Alaska from the list.<br />
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Turning to the 10 worst states, the worst is Hawaii at $22,107. Wow. Double surprise there. First, I would have thought that the worst would be a high-tax state like New Jersey. Also, the variance between the #1 state and Hawaii was just HUGE - $41,986 as compared to $22,107 - that's almost DOUBLE! This will definitely help keep me warm through the cold IL winter - the average IL family is MUCH better off than the average Hawaiian family.<br />
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Next, there's a big jump up from Hawaii to #2 Maine at $29,159 - about 32% - and the remainder of the list is in the $30K range.<br />
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One state that I was NOT surprised to see on the worst states list was California at #4 at $29,772. The article cites both the high taxes and the high cost of living in California. I have friends living there and I can see the toll that the high taxes and high cost of living - especially housing - take on their ability to put money aside. Some have been out of law school for 15 years and work at top firms, but don't even have their student loans paid off. It's might be too late for them to pay it off anytime soon, though, because their kids are now going to expensive private schools.<br />
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So what do we learn from this article? The lists can give some insight, but if you look at the four factors upon which the lists are based - Average state wages, State unemployment rate, State tax rate, and State cost of living - you probably don't care too much about the unemployment rate or of the average state wage. Consequently, the lists should not be taken as gospel.<br />
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However, the state tax rate and cost of living figure very prominently in determining how far your salary will really go - and really should be considered if you find yourself in the enviable position of comparing offers.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com0tag:blogger.com,1999:blog-3521318064826848712.post-188175642559354832011-07-29T21:23:00.000-05:002011-07-29T21:23:49.047-05:00Deans Have Limits, TooI wanted to draw attention to<a href="http://abovethelaw.com/2011/07/a-law-dean-resigns-and-spills-the-beans-on-how-his-university-has-been-taking-advantage-of-law-students/"> this article on ATL</a> about the outgoing Dean of the University of Baltimore Law School. Here's a guy who took a law school from 170 (out of about 200) to 117 and seems to be getting the boot because he is daring to complain when the University "re-appropriates" 45% of the of the tuition paid by law students and diverts it to other University programs. It's also surprising that the Dean provided actual, precise numbers - and that they are stunning. As stated by the Dean, the most recent "tuition increase generated $1,455,650 in additional revenue. Of that amount, the School of Law budget increased by only $80,774." That is, in addition to diverting 45% overall, of the recent increase in tuition, the University diverted about 96% of it.<br />
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I want to draw attention to this because lots of angry recent law grads complain about their tuition going up so drastically over the last few years. However, they usually point to the Dean's salary or the salary of the professors as responsible for the increase. Now, there is certainly an element of truth there, but a very significant (and often overlooked) driver of increased tuition is that the law school tuition dollars are "stolen" by the University.<br />
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If I were paying law school tuition right now, I would be very pissed to learn that 45% of what I am paying does not even go to the law school. I would really question the value of the tuition that I was paying. I would be even more pissed when I learned that 96% of the most recent tuition increase did not even go to the law school.<br />
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Similarly, I think that this raises some real concerns for lenders (especially the federal government). When you stop and think about it, the government is lending a student say $20,000/year for law school - but the University is diverting $9,000 to other purposes. If this were a government contract (which a school loan effectively is) having a government contractor divert 45% of the contract price to pay for something other than the contract can be known by a very clear term - "Contract fraud".Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com5tag:blogger.com,1999:blog-3521318064826848712.post-68336402375796003512011-07-29T16:06:00.000-05:002011-07-29T16:06:20.776-05:00Why The ABA Accreditation Committee Won't Lead - Part 2 - The FixHmmm. In <a href="http://thelegaldollar.blogspot.com/2011/07/why-aba-accreditation-committee-wont.html">this previous post</a>, I commented on the internal conflict in the ABA Accreditation Committee. The Committee has traditionally had a very law school-friendly membership and has previously seemed to act in the best interests of the law schools, rather than the students. Although I was aware that some changes to improve transparency had been proposed to the Committee, the previous response of the Committee to such efforts led me to believe that they would be mostly ignored - to the detriment of students attempting to rationally evaluate the value proposition for going to law school.<br />
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However, I have to give credit where credit is due. Perhaps due to one or more of: 1) a growing realization of the issue, 2) increased coverage in the popular press and "scamblogs", 3) a growing realization that students lives were being crushed, 4) a desire to avoid conflict, or a combination of one or more of these, the Committee announced in a press release on Wednesday that <a href="http://www.abajournal.com/news/article/abas_legal_ed_section_approves_questionnaire_changes/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email">they have improved many important changes in their law school questionnaire.</a> Read on to see some of the changes and the potential impact.<br />
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<a name='more'></a><br />
Here's a quote from their <a href="http://www.abanow.org/wordpress/wp-content/files_flutter/1311794682lawschool_employent_info_072711.pdf">press release</a> with certain sections highlighted. <br />
<blockquote>As to job data, the 2011 Annual Questionnaire will request from law schools information on their graduates’ employment status, employment types and employment locations. It will also request<br />
additional and new information on <span style="color: red;">whether a graduate’s employment is long-term or short-term</span>. Finally, it will ask<span style="color: purple;"> how many, if any, positions held by their graduates are funded by the law school or university. </span></blockquote><blockquote>New data will also be collected in the spring of 2012 (soon after February 15, 2012, the traditional nine-month-after-graduation date), for the graduating class of 2011, including <span style="color: blue;">whether the graduate’s job is part-time or full-time;</span> whether the job requires bar passage; whether a J.D. is preferred for the job; <span style="color: red;">whether the job is in another profession; and whether the job is a nonprofessional one</span>. Definitions for these categories will be developed this coming fall. However, rather than wait until August 2012 to collect these new data, our plan is to collect those data from the schools soon after February 15, 2012 and display the data on our website in the late spring/early summer.</blockquote>My feel is that this represents appreciable progress. It's not perfect, but it is a substantial move in the right direction. The new question go right to the heart of several "scams" that law schools have been using to over-inflate their hiring information. For example, in the first highlighted section, some law schools have been reporting part-time work as "employed" in their "employed at graduation rate" without breaking out the statistics. That's pretty misleading unless you break it out. (One thing that I would like to see, that may be beyond the scope of the committee, it that law schools only be allowed to report "employed at graduation" if they actually break out the statistics.)<br />
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The next highlighted sections go to another recent scam by the law schools to inflate their hiring numbers - the law school just creates some short-term positions and "employs" otherwise unemployed grads. These students are then reported as "employed at graduation". Obviously, having to break out that number will lessen the manipulation and give potential law students a greater understanding of the financial realities of going to law school. I like that the questionnaire mentions employment by either the law school or the university - one draft proposal that I saw only addressed the law school, which I thought left a gaping loophole of potential university employment (especially considering that universities typically divert millions from their law schools.)<br />
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The last highlighted section seems like a good efforts, but will actually be dependent on the definitions developed this fall for "professional". For example, under previous law school reporting, if a law student was unable to find a job as a lawyer and instead took up, say, pole dancing - the law school would still report that person as "employed at graduation." That's pretty misleading. However, now such a job would be (presumably) reported as "non-professional", which would likely give further transparency - which is good.<br />
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All of the above steps are moving in the right direction. However, there are significant problems to overcome. Some of these include:<br />
1) Selective reporting - law schools typically only report a small percentage of their hiring results - and have a direct financial interest in not reporting bad results.<br />
2) Lack of auditing - Law schools have a direct financial interest in fudging the numbers and manipulating the process. However, there is a point where the stretching just becomes too much. In the real world, we lessen this monkey business by periodic audits - or at least the threat of audits. However, that's not in place for law schools at this time.<br />
3) Irresponsible advertising by law schools - even if the law school admits in its reported numbers to the ABA or NALP that only 20% of its graduating class found work as a full-time lawyer, if they then turn around and advertise to law students that their "employed at graduation rate is 95%!!!!", then they are irresponsibly creating a false impression in the eyes of their potential consumer. (Also, based on the number of blogs pointing this out, it would be ridiculous to think that they can claim that they were unaware of it.) The two facts of 20% employed as graduation as full-time lawyers and 95% employment rate at graduation are not mutually exclusive when you consider the part-time and non-lawyer jobs, for example. However, most potential consumers assume that the 95% employment means that 95% find jobs as lawyers - which is just wrong.<br />
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Here are some aspects that I would suggest to build on the present progress and address some of the concerns above:<br />
1) Require 100% reporting of employment results from law schools - Really, is that so hard? If you figure an average class size of 300, the law school could set up a survey and track responses - and there are even free survey software available online. For those e-mail addresses not responding, the Career Services Office could follow up with a reminder and eventually a phone call. The law school would probably get 90+% compliance right off the bat. If not, make it a requirement to receive the diploma. It's really not too much to ask that law students click a couple of e-mail links to get their diplomas. It also really gives accurate data about hiring outcomes by eliminating the law school's ability to do selective reporting. Further, 100% reporting should be considered a requirement in the law school accreditation process.<br />
2) Auditing - The ABA or NALP should implement randomized periodic reporting auditing for law schools. Possibly with some sanctions if funny business is discovered.<br />
3) Computerized reporting directly to ABA or NALP - do we even need to keep the law schools around as a conduit at all? Passing the results through the law school just gives an opportunity for mischief - and they have a direct financial incentive to do such mischief. Instead, the ABA or NALP can collect an e-mail list from the law school of all law students, and mail them links to their own employment survey. Confirmation of response may then be relayed to the law school. Response can still be required for graduation and law school accreditation.<br />
4) Require law schools to clearly advertise the unvarnished truth - Require that when law schools advertise hiring results, they must advertise as their "Employment Rate" ONLY full-time, professional, non-temporary, etc., employment as a lawyer. That is, the REAL law jobs. They can report the non-professionals as "Non-Professional Employment After Graduation" and the temporaries as "Temporary Employment At Graduation" in separate columns if they want. However, they can't add those together to project an artificial number. That is, potential law students expect "Employment Rate At Graduation" to be only those employed as full-time, professional, non-temporary, non-short term lawyers - ONLY those - so that's what the "Employment Rate At Graduation" should be. Law schools should no longer be able to mislead potential students by reporting a hiring statistic that they 1) know that law students are not correctly understanding, 2) presents an unrealistic vision of hiring outcomes, and 3) are often purposely abusing when they talk to law students in order to convince them to go to law school.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com3tag:blogger.com,1999:blog-3521318064826848712.post-89336265820172838722011-07-21T13:10:00.000-05:002011-07-21T13:10:25.474-05:00Why The ABA Accreditation Committee Won't Lead - Part 1 - The ProblemThere's a great article on <a href="http://abovethelaw.com/2011/07/aba-claims-it-lacks-authority-to-stop-proliferation-of-law-schools-and-claims-it-doesnt-matter-anyway/">AboveTheLaw</a> with regard to the bi-partisan heat that is currently being put on the ABA's law school accreditation committee with regard to their failure to regulate legal education in a meaningful way. The ATL article exposes as bunk much of the ABA's response to Senator Grassley's questions and raises a couple of pointed issues. <br />
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However, the author and many commentators that have entered the practice of law more recently might be able to more readily understand the accreditation committee's response with the benefit of a little context. In this post, we will take a look at the context of the problem - and then look at some aspects for fixing it in the next post.<br />
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<a name='more'></a><br />
More specifically, in 1995 the committee used to be <a href="http://en.wikipedia.org/wiki/American_Bar_Association#Accreditation_of_law_schools">pretty much exclusively run by law school faculty</a>, but the Department of Justice stepped in and sued them as anti competitive - and won. They slapped a <a href="http://www.justice.gov/atr/cases/f1000/1034.htm">consent judgement</a> on them and hit them with a $185K fine.<br />
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Well, for law school professors and Deans - who are often incredibly egotistical and often view themselves as literally above the law - this was an incredible insult. It effectively calls into question their professional judgement and was viewed as some as something like "the government messing in our personal affairs - we know better how to run things." Since that time, it has seemed like many members of the committee have dedicated themselves to doing two things 1) pushing the line toward perverting/suborning the consent judgement, and 2) trying to "prove" why the consent judgement renders them ineffectual. <br />
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With regard to the first element, the consent judgement limits the number of "deans and faculty" - so instead you get people that are "retired" deans or faculty or have some other questionable relationship with law schools. Their interests are often clearly aligned with that of the deans and faculty, but they fall outside the consent judgement. With regard to the second element, the committee has in general often seemed to adopt a rather childish attitude of "well, if that's what you want, then I will show you how bad it will be"- or - "Oh, law school management is ineffectual and things are going wrong? Well, we would LOVE to do something, but unfortunately we have this silly little consent judgement that effectively ties our hands. If you could only make that go away and apologize for bothering us, then we could get back to running things the right way - our way - they way that things should be and always have been run."<br />
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I would look for the ABA to plead powerless even more going forward. In this regard, people should note that when they say things like "such as actions are illegal", the "illegal" part is usually a veiled reference to the consent judgement. Think about it - would a lawyer ever take a firm position like "it is illegal" with regard to an action that they wanted to engage in? Would a law professor ever use such firm language unless they were advocating for something? Instead, the accreditation committee is attempting to use this crisis as an opportunity to have their restrictions relaxed and increase their personal power.<br />
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I don't mean to impugn all members that have ever served on the committee - there have been attempts to reform and there are still people trying to reform. However, there seems to be a consensus bad attitude that really needs to be considered as context in understanding their actions. Frankly, we are not talking about FACTS here - the actual illegality or what can literally be done or not done - it should be appreciated that their response is very definitely a work of ADVOCACY. Attempting to argue facts with them at this point would not be productive. <br />
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We will discuss some ways to address this in Part 2.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com2tag:blogger.com,1999:blog-3521318064826848712.post-79585278139457183562011-07-19T17:06:00.000-05:002011-07-19T17:06:54.823-05:00Everything Sunny All The Time AlwaysIn <a href="http://thelegaldollar.blogspot.com/2011/07/law-graduates-today-vs-10-years-ago.html">my most recent post</a>, I referenced an <a href="http://www.nationaljurist.com/content/good-news-about-dismal-salary-report">editorial from the National Jurist</a> - and something from that editorial has really stuck in my craw, especially in light of their recent "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" <a href="http://www.nationaljurist.com/content/recent-law-grads-enjoy-better-standard-living-10-years-ago">article about how law students today enjoy a better standard of living than 10 years ago</a>.<br />
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More specifically, the <a href="http://www.nationaljurist.com/content/good-news-about-dismal-salary-report">most recent editorial</a> states: <br />
<blockquote>It’s almost as if the big firms grew fat on the wild speculation and frenzy of the housing market and financial markets. And then when things came to a halt in 2008, the party was over for the big firms. Sadly, many law students were hoping to cash in on that party, but arrived too late. That then led to a lot of negativity about law school over the past few years – especially from the so-called scam bloggers.</blockquote>Initially, I agree with the perception that large law firms expanded along with the housing and financial bubbles - and then crashed in 2008 when the work went away. However, the rest of the quote seems to adopt a tone that is particularly offensive in light of the seemingly constant pro-go-to-law school message that National Jurist appears to espouse.<br />
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<a name='more'></a>More specifically, they attempt to imply that law students that graduated after 2008 were being motivated by greed ("were hoping to cash in") and that their inability to "cash in" is the cause of negativity. In this regard, the article seems to shift "blame" for the law students not having jobs onto their own "greed". <br />
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National Jurist - America is not North Korea where the past can be re-written in an Orwellian attempt to maintain that the "state is always right." When did the National Jurist publish articles warning those considering going to law school of the approach of a bubble? When did the National Jurist warn those graduating in 2008 that salary increases were not likely to continue? Also, did you broadcast this message in about 2005 when those graduating in 2008 would have been able to consider it? Even if you did, what was the percentage breakdown in articles that you published during that time frame that fell into the following camps: 1) pro-go-to-law school, "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>", as opposed to 2) cautionary tale, law school might not be a good opportunity, think twice before attending?<br />
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My recollection is that the overwhelming majority (if not all) of the articles that you published, National Jurist, during the time frame of 2005-2006 were very much pro-law school. I also recall that most other articles published by most other law-related media were also pro-go-to-law school during that time frame. Considering that a prospective law student during that time frame would have faced a pretty unanimous blare of pro-go-to-law school propaganda, how do you arrive at the contention that those law students when to law school because of their "greed"?<br />
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National Jurist, you - and your relentless "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" message - are in part responsible for those graduating after 2008 not having jobs. You were part of the unitary voice urging those who wanted a better future for themselves to go to law school. You might respond that "no one could have predicted the economy", but then if that is so, the honorable thing to do is admit that you were wrong - that the "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" was based on your misunderstanding then and are no longer right.<br />
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It is absolutely NOT honorable to fail to mention your part in inducing law students to go to law school by consistently telling them what a great opportunity it is - and then attempt to characterize the law students as being motivated by "greed" and solely responsible for their bad employment outcome. Let's see - your articles give advice to prospective law students to go to law school, they do so and then can't find a job and you want to portray them as greedy and responsible for their own misery? Come on! You are effectively telling the law students "you were a sucker for believing what I was saying." That's just not cool.<br />
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But you know what the worst part is, National Jurist? <u>YOU'RE STILL DOING IT!! </u> You are still encouraging people to go to law school by publishing misleading articles about law school outcomes. I'll <a href="http://www.blogger.com/">cite my previous post where I review you article entitled "</a><a href="http://thelegaldollar.blogspot.com/2011/07/law-graduates-today-vs-10-years-ago.html">Recent Law Grads Enjoy A Better Standard Of Living Than 10 Years Ago" </a>and we determine that it is just NOT TRUE for the majority of law students. You are also aware (<a href="http://www.nationaljurist.com/content/good-news-about-dismal-salary-report">as referenced here</a>) that the 2010 data is considerably worse than the 2009 data - however you don't even mention it in the article! Instead, you again attempt to put an "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" spin on the terrible information by entitling the article "The Good News About The Dismal Salary Report." <br />
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Frankly, National Jurist, how dare you. How dare you consistently maintain your "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" message - and then when people follow it and can't get a job, attempt to distance yourself and place the blame on the law students by portraying them as "greedy" - and yet, incredibly, at the same time keep pumping out the "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" message. The law students that graduated in 2008 were sold a bill of goods - and you did the selling (in part). <br />
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Your disdain for the "scam-bloggers" also shows that either you 1) fail to appreciate the disconnect between your "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" message and the actual employment outcomes, or 2) are attempting to minimize or spread disdain for their voice. In reality, the only reason that the "scam blogs" exist is that they provide a valuable counter-voice when (for many years) every other voice seemed to hegemonicallyesque way support a "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>" message that has disastrous impacts for tens of thousands of law students every year - these are real people whose lives are being severely impacted. That is, if traditional media - such as yourself National Jurist - presented a more balanced outlook with regard to going to law school, if you reported on the failures and problems as well as the triumphs, then there would be no need for the "scam blogs" and most likely they would not exist. Why? <u>Because they would not have been sold a misleading bill of goods in the first place by you and others.</u> That is, with more balanced reporting about the cons of the law school decision there would likely not have been the current bubble of law students - or it would be less. Further, even if there was some bubble, they would not be able to think that you were part of the "scam" because your message had been consistently balanced - if not somewhat skeptical. <br />
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Although their modalities may occasionally be immature or offensive, at root the "scam blogs" exist because you (and others) are not doing your job in providing a fair and accurate picture of the pros and cons of going to law school. Further, you would ideally write with an eye to really communicating to undergrads (who may have rosy vision) that there are potential severe negative repercussions. I urge you to do the right thing and 1) back away from the "<a href="http://www.youtube.com/watch?v=OhohteHuyPM">everything sunny all the time always</a>", pro-go-to-law school message and accord with your obligation to the public to provide a more balanced picture, and 2) take responsibility for your previously urging law students to go to law school and there being an undesirable employment outcome - it's OK to mention that you did not know what the economy would do, no one did - and develop a plan so that it is less likely to happen again, and 3) above all else, stop beating up on the poor, out-of-work-and-buried-in-debt kids that you helped create. Stop portraying them as greedy. Do the right thing. Stop selling law school and save the lives of the people who would otherwise attend and be left with nothing by debt and a lingering resentment that they have been deceived.<br />
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Last Minute Addition - National Jurist - you may ask yourself "who should I model in this brave new world"? In that regard, I would put forth <a href="http://www.blogger.com/">this recent New York Times article on NY Law School</a>. Write articles like this and you need not be bothered by "scam blogs" - or your conscience.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com2tag:blogger.com,1999:blog-3521318064826848712.post-448034004069250122011-07-18T11:46:00.000-05:002011-07-18T11:46:24.645-05:00Law Graduates Today Vs. 10 Years AgoThere's an somewhat misleading <a href="http://www.nationaljurist.com/content/recent-law-grads-enjoy-better-standard-living-10-years-ago">article</a> and accompanying editor commentary at the National Jurist. In the article, they assert that <a href="http://www.nationaljurist.com/content/recent-law-grads-enjoy-better-standard-living-10-years-ago">recent law grads enjoy a better standard of living than 10 years ago</a>. More specifically, they assert that graduates employed by law firms have seen their "standard of living" rise by 59% since 1999, while those in public interest have seen their "standard of living" rise by 6%. They also assert that the impact of the recent income-based repayment options is to further increase this advantage. While <a href="http://www.nationaljurist.com/content/why-some-grads-are-worse-while-others-doing-great">the editor commentary appears to temper that assertion a great deal</a> (although why they did not include the commentary in the article for fairless' sake, I don't know) it still doesn't paint an accurate picture of the changes in standard of living for a person contemplating law school. Let's take a tough look at the numbers below.<br />
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First, the article admits that the standard of living (which I will henceforth abbreviate as "SOL" with a touch of irony) has declined for the unemployed, underemployed, and those employed by small law firms of 2-10 attorneys. Woah. When we dig beneath the numbers, that's a pretty sizable percentage of law school graduates.<br />
However, for firms of 11-100, the article states a growth in SOL of 6-15% from 1999 to 2009. Reading between the lines, the article admits that it is really the students employed by the firms having more than 100 attorneys that skews the SOL numbers - <u>and that only 22% of attorneys (in 2009) got such jobs.</u> <br />
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Additionally, from the editor's commentary we learn that only 9.3% of the law school graduates were employed in firms of 11-100 (those having a small positive growth). More importantly, this means that only about 31% of the law school graduates in 2009 experienced higher SOL than in 1999. Thus, even by the National Jurist's own numbers (which appears to be in part based on the<a href="http://thelegaldollar.blogspot.com/2010/09/what-supply-and-demand-means-for-law.html"> very-inflated NALP numbers</a>) <u>69% of law school graduates experienced a lower SOL in 2009 than in 1999.</u><br />
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That's the number that people considering law school should focus on - <u>even in 2009 (when hiring was a LOT better than it is now) law school was a worse choice for the vast majority of law students (69%) than it was in 1999.</u> Returning now to the title of the National Jurist article, they assert that "Recent Law Grads Enjoy A Better Standard Of Living than 10 Years Ago" - however,<u> that is just not true for the overwhelming majority of law students</u>. While it may be true for 31% or them and that 31% may skew the average higher, the title of the article may give the casual reader (or undergrad considering law school) the impression that all law grads are better off now then in 1999.<br />
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Which leads to a second, extremely important factor that is not mentioned in the article and is also very important to those considering law school - the performance of the class of 2010. <a href="http://www.nationaljurist.com/content/good-news-about-dismal-salary-report">I'll even use the National Jurist's own article about the 2010 results</a> - in short, median (not average) private starting salaries are down from $125K in 2008 to $104K for the class of 2010 (a 16.8% decline). That's a huge decrease - and yet there's no "Update" connected with the previous "pro-going to law school" article - there's no revision of the 2009 article to reflect the 2010 data. Further, while the first article is tagged "breaking news", the second article is tagged "critical issues in legal education", and thus the second article won't be displayed when a potential law student is looking for breaking news about law school. <u>Potential law students are left with a very pro-law school article that was just written and erroneously seems to reflect current data. </u><br />
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Further, the most recent article mentions that the number of law students employed by big firms - the only real "winners" in the SOL increase mentioned in the first article have decreased to the lowest level in 13 years, and that hiring at big law firms is off by 35%. Let's take a look at what this likely does to the percentage of law school graduates that experienced an increase in SOL. First, for those employed by firms of 11-100, their 2008 SOL increase was 6-15% - that's now completely wiped out by the 16.8% decrease in salary - all of them are likely now experiencing a decrease in SOL. Further, applying a 35% hiring decrease to the 22% of attorneys that previously got jobs at large firms leaves us with about 14%. Thus, even if you swallow the over-inflated, self-reported (by law schools who have an incentive to inflate) employment and salary numbers reported by NALP and integrated into the National Jurist numbers, I would submit that a reasonable conclusion to draw is that using the 2009 numbers that <u>only about 14% of law school graduates in 2009 experienced an increase SOL from law school graduates in 1999</u>.<br />
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<u>Consequently, for about 86% of law students, graduating from law school in 2010 was a worse deal than graduating from law school in 1999.</u><br />
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Lastly, I want to applaud the National Jurist for some honesty and urge them to be more forthright. They mention that when they first did their SOL living study in 1999 that graduates that entered private practice at six law schools had a lower standard of living than they did as students (after loan payments and taxes). <u>However - where is that information for 2009 grads? For 2010 grads? Which specific law schools were these? This type of information would be very important to a potential law student and would be very helpful in holding law schools responsible so that legal education may be changed for the better.</u>Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com3tag:blogger.com,1999:blog-3521318064826848712.post-79936896929169026572011-07-12T11:33:00.000-05:002011-07-12T11:33:32.339-05:00Summer Associates - "Clients" Not "Bosses"In <a href="http://thelegaldollar.blogspot.com/2011/07/summer-associates-know-your-client.html">my previous post</a>, I discussed how summer associates often have internalized a "corporate" paradigm and subconsciously expect that such a model will be followed when they "work at" a law firm. Instead, a law firm operates very differently - lawyers must take responsibility for themselves and the senior attorneys are really the clients of the younger attorneys. However, as summer (and new) associates attempt to internally resolve the dissonance between the "corporate" and "law firm" models, they often make wrong or nonsensical moves. Let's take a look at some actual experiences that I have had or have discussed where summer associate's lack of understanding of the law firm model led them to the wrong move.<br />
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Before we get started, recall from my previous post how summer associates seem to understand and accept certain types of behavior with regard to "a lawyer" and their client, but somehow fail to realize that the senior attorneys are the associate's clients. In each of the situations below, if the summer associate had regarded their relationship with the senior attorney as lawyer-client, then they would probably have done the right thing. However, the summer associate's indoctrination to the "corporate" model (or in some cases just plain lack of understanding) steered them the wrong way.<br />
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Example 1 - Consider a hypothetical - IBM (or some other large corporation with a lot of legal work to have done) calls a lawyer and asks the lawyer to do some work for them. In response, the lawyer says "Sorry, I'm doing work for [tiny company], I can't be absolutely sure that I will have time to do your work, so I don't want to take it on." This is obviously not reality. Instead, the lawyer would thank IBM for coming to them and either 1) make time, or 2) offer IBM a timetable that they can make while managing their other work and see if it is acceptable to IBM, or 3) tell IBM that they will call them right back and then go back to the tiny company, and try to work out a schedule that will allow them to satisfy both the tiny company and IBM.<br />
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That is, the lawyer would WANT to take on the work and would do his darnedest to try and make it happen. The lawyer would not, for example, tell IBM that IBM will have to call the tiny company and work out between them how many hours the lawyer should be spending on IBM's work vs. tiny company's work. The lawyer would work to try to be able to take on IBM's work - the lawyer would make it "his problem" to find a solution, not try to pass it back and make it "IBM's problem" to find a solution. <br />
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And there is a simple reason for this - job security. IBM has enough work for the lawyer so that the lawyer can bill plenty of hours - the tiny company does not. <br />
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For most summer associates, the above example seems pretty obvious. However, consider the situation where a senior attorney calls a summer associate and asks a summer associate to do an assignment. In response, the summer associate says "I can't, I'm doing something for [a first year associate]" and then leaves it at that.<br />
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Wow. Someone has failed to understand the model and failed to appreciate that the senior attorney is a much better client to have than the first year associate. You are talking IBM vs. tiny company in the example above. The senior attorney is much more likely to have work to keep the summer associate busy.<br />
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Instead of the response above, the summer associate should have acted like the attorney in our hypothetical - thank the client for the call and make it your problem to try to make the situation work if you can. For example, propose a timetable that you can commit to and see if you can bring the senior attorney's work on board. Also, if there is a question about the timetable, the summer associate should take the initiative to call the first year associate and try to work out a schedule that works for both the first year associate and the senior attorney - then call the senior attorney back. In this regard, the summer associate would be an active, responsible participant serving his or her client. It also shows the senior attorney that you know how to manage clients.<br />
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This is in contrast to the "corporate" model - under the "corporate" model, the "employee's" responsibility would end when they merely inform the "manager" of their schedule. The manager would then have the responsibility to work with the other managers assigning work to the "employee" to develop a new work assignment for the employee. In the "corporate" model, all of that management and scheduling is not in the employee's hands - the employee is "externally managed" rather than "internally managed" like in the law firm environment.<br />
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Again, what's the bottom line with why the summer or new associate would want to take on work for the senior attorney? Again, it's job security - just like for the lawyer in the example above. Recall that in the law firm model, the associate is responsible for getting the hours that they have to bill - if the lawyer is not billing, it's not the client's fault. <br />
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Unfortunately, the summer associate has failed to impress the senior attorney with their attitude. The senior attorney is thus likely to send his work elsewhere (to another summer associate) in the future - and the summer associate has missed out on a great opportunity. Someone else will benefit instead.<br />
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<span style="font-size: x-large;">Career Services Advice Gone Wrong </span><br />
The example above also give us an opportunity to see how well-meaning advice by the summer associate's Career Services Office (CSO) can be mis-applied to the detriment of the summer associate if the summer associate does not understand how the advice should be applied.<br />
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That is, assume in the above example that the summer associate's CSO warned the summer associate to "be sure not to over-schedule yourself". The summer associate then interprets this advice through a "corporate" lens to mean that they should only take on one project at a time and be very reluctant to take on any project that they are not absolutely sure that they will have plenty of time to do.<br />
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Well, that just doesn't reflect how it works for a practicing attorney (which the summer associate, when pressed, would likely admit) so it really is not the model that the summer associate should attempt to apply. Instead, an attorney on hearing that advice would continue to be aggressive in soliciting work from clients, but would make extra efforts to determine how long something would take and then maybe leave themselves and additional 10-20% margin.<br />
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So, in the example above, instead of just saying "I can't, I'm doing something for [a first year associate]" because the summer associate is worried about having enough time, the summer associate would have been pro-active. They would know how long their current task would take, give themselves a reasonable 10-20% margin, and then schedule the next task with the senior attorney. After all, if all goes well and they get done a little earlier, the senior attorney is not going to complain about them getting started earlier.<br />
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For example, assume that the summer associate is working on something that they have been told will take them "the rest of the day". The senior attorney then calls up and asks them to do work. The summer associate conveys that they are happy to get the call and would be happy to do the work. They have something that they are finishing up right now, but they will be free to start on the work "around noon tomorrow" - would that be acceptable to the senior attorney? (If not, the summer associate should aggressively try to work out the schedule with the first year attorney as discussed above.)<br />
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You can see in this example how the summer associate has given themselves an extra 3-hour window tomorrow morning in case their current project takes longer than it is supposed to. If instead they get the project done tonight, just approach the senior attorney early tomorrow and say you wrapped up your previous project faster than you expected. Everyone likes nice surprises.<br />
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This is really how the CSO's advice to "be sure not to over-schedule yourself" should be applied. The advice should not be used in any way to make it look like you don't want the work. Again I urge summer associates to shed the "I am an employee" model and adopt the "I am a lawyer serving my client" model.<br />
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<span style="font-size: x-large;">Don't Diss The Tiny Company Either</span> <br />
Some people might interpret my example of IBM vs. tiny company as implying that it is OK to short-change the tiny company or to communicate in any way to the tiny company that they are not a desired client or that they are valued less than IBM. That is certainly not the case. The tiny company should be treated with respect and the lawyer's work for tiny company should be good. The lawyer also should not approach tiny company and say "IBM asked me to do work, so of course I am going to put your work on the back burner" - or worse yet, that "I am going to stop doing the work I said I was going to do. Your work obviously is less important than IBM's." <br />
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The same should apply with the senior attorney and the first year associate substituted for IBM and the tiny company. IBM calling does not relieve you of your responsibilities to tiny company - and it is the lawyer's responsibility to work it out so that both parties are satisfied. Most summer associates can clearly see this and just need to internalize the firm lawyer-client model in order to be able to successfully apply it.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com3tag:blogger.com,1999:blog-3521318064826848712.post-1714567643139161312011-07-08T12:22:00.000-05:002011-07-08T12:22:10.680-05:00Summer Associates - Know Your ClientI sympathize with summer associates - and I remember being one. You walk through the doors of this strange place called a "law firm" often armed with very little in the way of factual and useful information. Unless the summer associate has had the opportunity to work in a law firm or maybe has relatives that are lawyers, the information that they have is typically a wacky gestalt of things they have experienced from TV, their law school experience, and their previous jobs. TV we know (and they know) gives them the wrong idea. However, often law school and their previous job experience also positions summer associates in a less-than-ideally-productive way. Let's take a look at how this situation develops and some advice that summer associates should keep in mind in order to maximize their chances.<br />
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So they know that TV is probably not an accurate window and they are not typically too invested in the model that they have seen there. However, it is often more difficult for them to realize that most of the "advice" that they get from their law school experience is also counterproductive. For example, law professors with minimal, decades out of date, or no work experience passing on what they have "heard" as authoritative advice does the law students a disservice. Also, most of the advice passed around by the other law students and the career services office is not useful either.<br />
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Also, summer associates that have worked at a typical "corporate" job before will often assume that they know what "work" is from their previous experience and that their law firm experience will adopt the same paradigm. Nothing could be further from the truth. Most regular jobs involve a management structure where the law student has been on the bottom. That is, typically their experience has been one in which they show up to work and someone (a manager) tells them what to do. The manager is also responsible for them - responsible to provide them with work, responsible for coordinating their work schedule, responsible for making sure that they are reasonably happy, responsible for giving them feedback, responsible for "reviewing" them and correcting them if they do something that the manager does not like. In a very real fashion, most jobs that summer associates have had train them to take orders and not to have any responsibility for themselves. <br />
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I know that a summer associate reading that last sentence would cringe and think something like "That's not true! I am a very responsible person!" Of course you are, but we are talking about a different type of responsibility here. In their "work" experience, there typically has always been a hierarchy and authority/responsibility flows from the top down. They have also typically experienced a situation where the entire company that they worked for is generally dedicated to the same goal or shared purpose - or there is a recognition that when the employee spends time working for another manager that that also provides value to the first manager indirectly by providing a benefit to the company as a whole.<br />
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Quite frankly, this model gets inverted in a law firm - and the quicker that summer associates (or new associates) come to understand this the better. Strangely, summer associates often understand and accept this model as applying to attorneys, but somehow differentiate themselves from attorneys and think of themselves as "employees" in the corporate sense - more in line with their experience. This often causes them to make the wrong moves in a law firm.<br />
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For example, summer associates seem to implicitly understand that a practicing lawyer can not expect his clients to manage the lawyer's schedule so that the lawyer is not overworked. They also seem to understand that the clients will typically not provide feedback to the attorney unless the feedback is solicited from the clients. They also understand that the client is not the lawyer's "boss" in the hierarchical corporate sense. Nor are clients responsible for providing the attorney with work, keeping the attorney happy, correcting the attorney, or indeed any of the "management" activities that the summer associates expect from their corporate experience.<br />
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Here's the big thing that summer associates and new lawyers need to understand and internalize:<br />
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<span style="font-size: x-large;">The senior lawyers in the firm are not your "bosses" in the corporate sense - they are your CLIENTS.</span><br />
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Let's give some examples of what this means and how it differs from the "corporate" experience that a law student might expect.<br />
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Example 1 - If a client commissions a lawyer to do some work and the work is not satisfactory, the client is not going to waste their time explaining to the lawyer why it is unsatisfactory and how to improve. Instead, the client is just going to get a new lawyer. That seems easily understandable to summer associates.<br />
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However, they sometimes have a hard time understanding the similar situation where, if a senior attorney (the summer associate's client) asks the summer associate to do something and they screw it up, the senior attorney is typically not going to waste their time (and it is wasted because they can't bill for it - unlike the corporate environment that would pay the laywer just for being "at work") trying to fix the summer associate - instead they will just go with another summer associate that will do a better job. Instead, it appears that many summer associates expect a more "corporate" model where they are "trained" (in that someone is externally responsible for increasing their knowledge and utility, and it is paid for on the corporate dime because they get to pursue their training during "working hours" that they are paid for).<br />
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Example 2 - Conversely, in a law firm, the summer associate (and new associates) are mostly responsible for their own training - and it needs to be done mostly on their own "dime". That is, it needs to be done on unbillable time in addition to their billable work.<br />
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It seems like the summer associate's first reaction to this reality is to bemoan the "fairness of it all." However, when they hear about a practicing lawyer having to study the law on their own, non-billable time in order to be able to better represent clients, they just nod and accept it. They think "of course - no client is going to pay for that study of the law, and the lawyer certainly needs to do it to keep current and do a good job." However, the summer and new associates seem to think that it is unfair when their "clients" - the senior attorneys - expect the same thing from them. This disconnect frankly blows my mind to an extent. Many senior attorneys are thinking to themselves: Are you not a lawyer (or soon to be lawyer)? Should you not expect to be treated like one?<br />
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Example 3 - Time/work management - The summer associates expect that the attorneys are coordinating between themselves to schedule work for the summer associate and will 1) provide the summer associate with a perfect amount of work to keep them busy, but not too busy; 2) while at the same time prioritizing the tasks of the different attorneys for the summer associate, and 3) allowing the summer associate's desired schedule and competing work demands to dictate both the time of completion of the task and the quality of completion of the task.<br />
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Yee gods. Clients just don't do that for lawyers - and when the summer associates think about "lawyers", they realize the ridiculousness of the idea. That is, a lawyer's clients are just not going to call each other up and schedule between themselves how much work they want the lawyer to do. They are also not going to be accepting of work that is not 1) provided when they want it and 2) of acceptable quality - not "rushed". Somehow the summer associates recognize that it is the lawyer's responsibility to manage between clients, but they fail to see that the senior attorneys ARE their clients - and should be treated as such. That really they MUST be treated as such if the associate is going to be successful over then next few years. Or else ....<br />
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Example 4 - Or else (and this is not likely to happen during the summer, but can happen to younger associates) if the clients (senior attorneys) don't like your work, then they are not going to give you any more. They are not under an obligation to keep giving you work and accepting an unsatisfactory product - no client is. However, (and here's a big difference in a law firm) the responsibility for delivering your hours rests with you - not with the senior attorneys. That is, if your work is bad, then the senior attorneys will stop giving you work, and if you have no work to do, then it is your fault, not the fault of the senior attorneys. Further, if you have no work to do for a considerable time, you are not contributing to the firm and will be fired. This will NOT be the firm's fault for "not working with you" - it will be your fault for not satisfying your client.<br />
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Again, associates seem to have no problem conceptualizing this when it comes to a "lawyer" - they understand that clients don't have to keep giving work to bad lawyers and the bad lawyer is on their own. However, they somehow expect a more forgiving, externally-managed, external-responsibility, corporate-style relationship with their own personal clients, the senior attorneys.<br />
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<span style="font-size: x-large;">The single best thing that associates can do</span> is "unlearn" their corporate experience and shed their corporate expectations. Their "corporate" expectations are giving them the wrong idea and steering them in the wrong way. They need to recognize that they are now selling their individual services to clients - with all that entails about expectations for the relationship and how it will be managed. Summer associates - view yourselves as the "lawyer" that you envision rather than an "employee" who "works at" a law firm Also, I hope that you can now understand more what I meant when I said that you don't have a lot of experience taking responsbility for yourself.<br />
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Reading back over this, I want to make clear that I am a little more sympathetic than it might appear from what I have to say. However, I view this post as a kind of "tough-love" and a clear message that I wish had been told to me straight and clear way back when I was a summer associate. The sooner I had come to realize what I discuss above, the smoother my own personal transition might have been.<br />
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Now that I look at it, this post has gotten kind of long, so I'll do another post later about some experiences I (or other attorneys that I have talked to) have had with summer associates who just don't get it - or who attempt to apply well-meaning "advice" (for example, from the career services office or professors), but do it wrong.Managing Partnerhttp://www.blogger.com/profile/05130017520583425490noreply@blogger.com0