Law School Deans Discuss State Of Legal Education - ChicagoLawyer

I just happened to read an absolutely excellent article in the September issue of Chicago Lawyer entitled "Law School Deans Discuss The State Of Today's Legal Education."  The article is a panel discussion among the Deans of John Marshall Law School (Tier 4), Chicago Kent Law School (#80), University of Chicago Law School (#5), DePaul University Law School (#98), and Loyola Law School (#78).  Now, Chicago Lawyer is geared toward practicing attorneys rather than prospective law students, so the Deans have an opportunity to tone down their marketing (not off, but down).  By seeing how the Deans talk about the issues among themselves, you can really learn a lot about how they view themselves and how they relate to students - let's take a look at some insightful sections below.

Law, Detroit, and the Gold Rush

In a comment in response to my recent post about how a law professor can feel un-rich while still making more than $250K/year, one commenter suggested that the legal industry in America is like the Detroit auto industry 30 years ago.  By this I took it to mean that the legal industry has been operating generally free of competition for decades and has grown slack, complacent, over-paid, and used to making their product their way - and in for a great fall over the next couple of decades.

That got me thinking - I can see the parallels in that both the legal industry and the auto industry are not doing well, but there are a lot of differences between the industries, too.  As I thought more about the cost structures, the products and how they are sold through dealerships, and several other factors, the analogy started to work for me less and less.  So I asked myself - what would be a better analogy to the state of the legal industry at this time, especially from the point of view of those thinking about going to law school?  Here's what I came up with:

Not Rich at $250K - It's How You Live, Not What You Make

There has been a lot of talk lately about a recent post from a University of Chicago professor wherein the Professor mentioned that he made more than $250K, but did not feel "rich".  Here's Above The Law's take on it - as well as the take from Sweet Hot Justice and the ABA.  Some commentators have been critical of the Professor, but let's take a look at his situation as a way for young associates and those considering law school to gain insight into what their life will be like if they are lucky enough to win the law school lottery and earn top dollar.  I previously talked about why 145K/year does not go as far as new law grads think it will, but now we can get an example of what life is like for a lawyer more than 10 years out of law school.

The Bubble In Bonds Part 3 - Other "Bond-Like" Instruments

This is Part 3 of a 3-part series about bonds.  In Part 1 of this series, we discussed that while bonds are generally believed to be "safe", they some bonds may actually lose 40%+ of their value in a rising in a rising interest rate environment - and from our current historically low interest rates, interest rates have no where to go but up.  In Part 2 we discussed some ways to invest more safely in bonds so that when interest rates rise and the current bond bubble bursts, you are not faced with worse losses than in the 2008-2009 stock market decline.  In Part 3 we will talk about some bond-like investments that you might consider in addition to or instead of bonds.

The Bubble In Bonds Part 2 - How To Invest More Safely

This is Part 2 of a 3-part series about bonds.  In Part 1 of this series, we discussed that while bonds are generally believed to be "safe", they some bonds may actually lose 40%+ of their value in a rising in a rising interest rate environment - and from our current historically low interest rates, interest rates have no where to go but up.  In Part 2 we will discuss some ways to invest more safely in bonds so that when interest rates rise and the current bond bubble bursts, you are not faced with worse losses than in the 2008-2009 stock market decline.

The Bubble in Bonds Part 1 - Appreciating Risk In Bonds

We know all about the bubble in stocks in 2000 and the more recent housing bubble, but many people don't seem to recognize that we are in a huge bond bubble right now.  However, a few people seem to be catching on - see this post and this article.  The bubble in bonds can be really dangerous because many people seem to associate "bonds" with "safety" and fail to appreciate that there is a huge difference in risk between bonds - even bonds issued by the same issuer just having different maturities.  In this series, we will discuss 1) some ways people fail to appreciate risk, 2) how to invest more safely in bonds, and 3) other bond-like instruments to consider that may be safer than bonds.  Part 1 of this series starts below.

Social Security Part 2 - Comparison To The Market

This is Part 2 of a 2-part series on Social Security.  In Part 1, we took a look at how the harder you work, the less you get on a percentage basis from Social Security.  In Part 2, we will take a look how your "return" on your Social Security "investment" compares with what you could get in the market.

Social Security Part 1 - Work Less, Get More!

Let's say you are a very hard worker and you manage to earn $106,800 this year (which happens to be the limit for Social Security) you pay 6.2% of your income in Social Security tax ($6,621.60).  On the other hand, someone else works part time (leaving them with plenty of free, enjoyable time) and only earns $9,132 for the year.  They also pay Social Security tax of 6.2% on their income which is $566.18.  Let's assume that both individuals work at the same amount, adjusted for inflation, during the 35 years of their working lives.  Did you know that when it comes time for retirement, the lesser-working person will receive Social Security payments of around $8,218.8/year - about 14.5 times the amount they paid each year in tax - and the harder-working person will receive payments of about $30,672/year - only about 4.6 times the amount that they paid each year in tax?  To put it another way, the lesser-working person gets more than three times the amount of benefit from each dollar of Social Security taxes they pay than the harder working person does!

This is Part 1 of a 2-part series on Social Security.  In Part 1, we will take a look at how the harder you work, the less you get from Social Security.  In Part 2, we will take a look how your "return" on your Social Security "investment" compares with what you could get in the market.

Get The Benefit Of Law School Without The Loans

Let's assume that you are an undergrad student majoring in psychology - which a lot of pre-law students actually major in.  You look up the employment numbers for people entering the labor market with a psychology undergrad degree and are horrified to learn that the average starting salary is $32,358 for psychology majors. You realize that the salary is not enough to afford a middle-class lifestyle and start looking around for what you can do to raise it.  Often, students in that situation start thinking about going to law school.  However, as we have previously noted, 6 out of 10 students that go to law school don't get the job that they want.  Fortunately, there are a lot of other options you can consider - options that it seems are being overlooked by a lot of students today and could put you in an even better position than going to law school!  Below we will discuss some ways to get out of your trap by getting the financial benefit of Law School without taking on the loans.

A New Mental Image For Law School

In my recent post "Greed and Horse Gambling" I compared 1) how some people who have a gambling problem are unable to reasonably evaluate the odds of winning and lose large sums of money based on the erroneous belief that the odds will somehow be different for them than for everyone else, with 2) how some potential law students make similar unreasonable decisions to go to law school.  I was just answering some comments in the article and I noticed that Google's Adwords advertising apparently matched the words in the article with this disturbing graphic (edited to remove company name):

Wow.  It struck home with me because before I read the caption I assumed that the person in the ad was a lawyer - probably based on the suit and tie and that he appears unhappy (has anyone else noticed that if you see an ad with a person in a suit and tie and they are unhappy, it always seems to be a lawyer?)

My second thought was that the graphic could very easily be applied to law school.  The students that are going to law school certainly don't think that they will lose everything by making a bad decision.  "Somehow" that $200K in tuition and expenses will get paid for - even though 6 in 10 students don't get the job that they want - and "somehow" they will still be able to have a great life with the millstone of huge debt hanging around their neck.  Unfortunately, in fact, gambling addiction hurts a lot more when you gamble on going to law school because the student loans are NOT dischargeable in bankruptcy!  If you lost it at the casino, you could discharge it in bankruptcy in most places - not so with student loans.

See that graphic, potential law students?  For the majority of you (60%), that's you.  Actually, because you won't be able to discharge the loans in bankruptcy, you will wish you had it as good as the guy in the picture.  Please, please be very careful when considering whether to go to law school.  It's the worst time in decades to go right now.

Greed and Horse Gambling

There's an interesting post over at The People's Therapist (via AboveTheLaw) entitled "The Cart and The Horse" that presents a different take on the question that we have recently been addressing about going to law school here and here.  The author worked in big law for multiple years and then decided to become a therapist focusing on lawyers.

The author notes an aspect that I have seen recurring with greater frequency more recently - that students go to law school without knowing and appreciating what they are getting in to.  I think that the author is dead on on some points, but maybe a little off on others.

When Is It Reasonable To Go To Law School? Part 2

In Part 1 of this inquiry, we set forth a determination methodology for figuring out whether it was reasonable to go to law school.  In summary, assuming that you are not independently wealthy, and you definitely know what the practice of law is like and you want to practice law, then perform two calculations depending on your nature. If you are more about personal fulfillment, then determine the minimum amount of income that you need and the amount the 50th percentile makes after law school.  If the post-law school amount exceeds your requirement for your projected working life (including potential family expenses and after loan payments and taxes) then you are free to go.  On the other hand, if you are more about maximizing your personal utility, then determine over your working life the amount you would make at your backup plan vs. the amount the 50th percentile makes after law school (including loan payments and taxes) and go with whatever is greater.

In Part 2, we will take a look at some variables that might influence our calculation one way or another such as; rank of law school, whether you go a scholarship, undergrad degree and more.

When Is It Reasonable To Go To Law School? Part 1

On the blog "But I Did Everything Right Or So I Thought", Angel recently posted an article entitled "Who Should Go To Law School?".  In the post, several criteria are set out and if the potential law student satisfies the criteria, then the author is " on board with you going to law school and I'll dance at your graduation."  The criterion are generally very sensible, but I have some structural differences with regard to the consideration and a somewhat different take on the criteria.  Read below for my take on whether you should go to law school!

The Lost Generation?

In response to the recent series of posts with regard to supply and demand (Part 1, Part 2, Part 3, Part 4), Coder E asked whether law students that were squeezed out today due to supply and demand would be part of a "Lost Generation" that will never get a job, or would they be re-considered if and when more lawyers are needed.  Once again Coder E has posed a great question - but a question that includes several competing concerns.  We will address the "Lost Generation" issue below.

Supply and Demand - Responding to Comments

The recent posts about supply and demand and its impact on the ability of law students to get a job at a law firm seem to have garnered some interest.  You can read the posts here: Part 1, Part 2, Part 3, Part 4.  Below I will respond to some of the questions that people have raised.

What Supply and Demand Mean for Law Students - Part 4

In this part, we continue our investigation of supply and demand in the legal profession and its impact on the hiring odds for law students  - Part 1 is here. Part 2 is here. Part 3 is here. In this part I we will investigate the timing of a decision to go to law school in light of current market conditions and compare it to other recent market experiences.
 

What Supply and Demand Means for Law Students - Part 3

In this part, we continue our investigation of supply and demand in the legal profession and its impact on the hiring odds for law students  - Part 1 is here. Part 2 is here. In this part I will contrast the current supply-and-demand impacted hiring odds with the previous situation in 2003 when the pendulum was in the opposite direction.

What Supply and Demand Means for Law Students - Part 2

In this part, we continue our investigation of supply and demand in the legal profession and its impact on the hiring odds for law students  - Part 1 can be found here. In this part, I will detail some of my personal observations from over a decade of recruiting law students.

What Supply and Demand Means For Law Students - Part 1

It seems as if one reason that law school still remains attractive to potential law students today is that they really don't understand supply and demand - and what it means for their careers.  But then, how could they?  They have not had much experience with supply and demand and its impact.  Their experience has been to try to get into a great school, but if they fail, then they can typically still get into a decent school.  They still end up having a good experience, but maybe not the best.  I think that some students subconsciously apply this methodology to their decision to go to law school.  They think that they will try to get into a top firm, but if they are unsuccessful, then some lower paid firm will certainly offer them an opportunity.

I think that the potential law student's prior experience also may be a reason why potential law students are so resistant to listening to the advice of recent grads - quite simply, the experience of the recent grads with the job market does not square with the experience of the law students with regard to school admission.  We will take a deeper look at this below.  Also, although I was going to try to focus on shorter posts, it seems like when I find I have something to say, I like to state it completely.  Consequently, I am going to break this discussion into three parts.