Monday, September 13, 2010

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.

First, we will lock down some reality with regard to what you could reasonably expect to earn by going to law school.  Then we will set forth a couple of ways to go about getting it.

First, with regard to expectations, as mentioned above, the majority of people that go to law school don't get the job they want.  Many law school graduates are not employed.  For those with a psychology degree (not engineering or business), let's assume that you will be in the top 25% of your peers - you will be fortunate enough to get a job, but it will be as a public defender or something similar.  We note from a recent article on Law360 that according to NALP the top salary that you can reasonably expect is from $42K-50K.
The median entry-level salary for civil legal services organizations lawyers, public defenders, local prosecuting attorneys and public interest organization lawyers ranged from $42,000 to $50,000, while attorneys with 11 to 15 years of experience at those organizations could expect a salary of between $62,000 to $81,500, according to the NALP's 2010 Public Sector and Public Interest Attorney Salary Report.
Now, that's an up from the $32K you were looking at as a psychology major, but it needs to be considered in light of the cost of attending law school.  Also realize that it is really going to cost you about $200K to go to law school - I know you think it is less, but you are underestimating it - read this post. That is, even if you end up making $46K, the midpoint of the range (which is really being pretty generous), assuming your loans are at 6.5%, then they are going to accumulate $13,000 worth of interest every year.  To put it another way, after just paying the interest on your loans, you are at (46K-13K = 33K/year) pretty much back where you started.  Admittedly, there are various programs that could offer you assistance if you work in a public sector, but their enrollment is limited and they have been suspended in may cases. Also, as we previously noted here, the NALP numbers tend to paint a rosier picture than actual reality and students who did not get jobs are not necessarily reflected in the numbers.

Further, note that even after 11-15 years, you will still only be looking at $62-81.5K - or an average of about $72K/year.

Well, it looks like law school really doesn't work for you financially - but let's take a look at a couple of ideas that could really work.  First, let's look at our strengths.  In making the decision to go to law school, you have indicated your willingness to undergo 3 additional years of schooling - annoying, painful schooling in which you know that you will have to work extremely hard.  Let's assume that you have also done at least some homework and learned what it is like to be a lawyer.  You no longer have much in the way of Hollywood dreams and you realize that it is going to be an unremitting nose-to-grindstone grind, not a fantasy land of satisfaction and personal fulfillment.  In short, let's assume that you are willing to work hard for 3 years, and then work at a job that is "work" not "fun" for your working career in order to earn enough money to live the middle-class lifestyle you desire.

Let's return to the NACE hiring statistics.  We note the following with regard to starting salaries:
  • Accounting  - $49K
  • Business Admin - $44K
  • Economics - $51K
  • Finance - $50K
  • Information Science - $55K
  • Computer Science - $61K
  • Engineering - $60K-ish
These compare very favorably with the $46K starting salary (before you subtract the loan payments) you were looking at before going to law school.  In fact, most of these salaries start higher than the top end of the $42-50K range which pretty much reflects the reality that you can expect from going to law school - not counting the negative impact of loans.  Further - some of these areas are almost as much as you could expect to be earning 11-15 years out with your law degree!

Let's say that you are smart enough to stop believing that "do what you love and the money will follow" baloney.  (Please, please, for the love of God, stop telling students this!)  Maybe you are insightful enough to recognize that if it were true, there would be scads of millionaire lifeguards, ski instructors, Caribbean resort workers, Renaissance Faire workers, stoners

So let's say that you are smart enough to look at the statistics and realize that you can get as much, if not more, of an earnings bump (without even having to take on loans), just by changing your major (assuming that you are still in college).  Of course, maybe engineering is too intense, too much physics, - but what about the other majors?  Information Science should be easily within reach - as would be Business Admin.  Additionally, economics and finance are really pretty accessible.

"Yuck, working with numbers is hard!" - Well, sack up, Nancy!  This is your future we are talking about here.  Also, earning one of these majors is going to put you in a better position than going to law school would - and without the $200K in loans!  Also, working as a lawyer would typically mean working longer hours, with far more boring work, with less job security than the options outlined above.  Also, if you were will willing to work hard enough to go to law school, then you should be able to tackle these undergrad majors - it will probably be easier than law school.  You are seriously looking at more money, a better job, and less work to switch the undergrad major than to go all the way through undergrad and then go through law school - it's not often that the "easy road" is the road to riches, but it is here.

But what if I previously swallowed the "do what you love and the money will follow" BS - or used college as a time to find myself/slack off/play around?  Now I am a junior or senior - the real world is approaching and it's too late to change now!

No, it's NOT too late to change now.  That's the sunk costs fallacy sinking in.  For example, let's say that you are a junior in Psychology and only realize now that you are screwed and law school is not really a good option.  So you switch your major to Business Administration, which is not really much of a stretch.  Most of your classes should carry over.  If it means taking an extra class or two during the semester, taking a class or two during the summer, or even extending your undergrad by a year or two, SO WHAT? For example, in the worst case you end up extending your undergrad by a year, but undergrad tuition is a lot cheaper than law school tuition, and it is only one year - not three like for law school.  Consequently, you can either take that one year and earn $44K with maybe $20K in loans (cost of the additional year), or you can take three years in law school, take ten times as much in loans ($200K) and make an average of $2K/year more.  The math speaks for itself.

What if you have already graduated with your Psychology degree, are working that $32K/year job and reality is just now setting in?  Well, maybe instead of just considering law school, you could consider going back to undergrad to earn a Bachelor's degree in one of the majors listed above?  For example, most colleges allow you to earn a second Bachelor's degree with only about 30 hours (two semesters) of credit.  Of course, you would have to have the right pre-reqs, and you may not have gotten them with your Psychology degree, but even if it takes you a whole additional year to get the pre-reqs, that would be a total of two years at a cheaper university - rather than three years at a law school.  You are looking at earning $44K with $45K in loans as opposed to earning $46K with $200K in loans.  Further, maybe your year off has motivated you to be aggressive and you aim for Finance or Economics ($50-51K) which puts you far ahead of what you could reasonable expect from law school.

Finally, if you really like dealing with the law, consider being a Police Officer.  Cops make really, really good money compared to what you could expect with your Psychology degree - and your Psychology degree may actually be useful in your job!  How much do cops make?  According to Wikipedia:
Starting salary for Chicago police officers is $43,104, increased to $55,723 after one year and an additional increase to $58,896 after 18 months. Promotions to specialized or command positions also increases an officer's base pay. Salaries are supplemented with a $2,920 annual duty availability and an $1,800 annual uniform allowance
So, after 18 months on the job you are making $59K, not including an additional $3K bonus and $2K uniform allowance.  Figure you will actually spend the uniform allowance, but you are still looking at $62K/year - higher even than the engineering majors!  Also, and here is the real benefit, realize that the $62K/year salary is before overtime - which is typically at time and a half or more - and that many police make tens of thousands/year in overtime.  It is not uncommon for police officers to take home six figures. This typically includes 20 paid holidays and 13 sick days/year, by the way.  This also does not include the typical large pensions that they get - and that's effectively an invisible salary boost that is worth 10s of thousands/year.  Six figures plus a good pension?  That's a better deal than you will get from just about any law firm today.

But wait, don't you have to go to the police academy?  Yep, but they typically pay you to go.  That's what that initial 18-month period above is when you are probationary.  Of course, different cities may offer different salaries for police officers, the above is just an indication of what is considered the going rate.

But isn't it dangerous?  According to here, the fatality rate for police officers is 16 per 100,000.  This compares to a fatality rate of 129/100,000 for fishermen - about 8 times higher.  Also, the fatality rate is 40/100,000 for farmers (about 2.5 times higher), 46/100,000 for steel construction workers (about 3 times higher), 37/100,000 for sanitation workers (about 2 times higher), 72/100,000 for airplane pilots (about 4.5 times higher), 21/100,000 for taxi drivers (about the same), 13/100,000 for cement manufacturers (about the same), and 22/100,000 for truck drivers.  So the short answer is yes, being a police officer is dangerous, but the risk of fatality is less than many other jobs. 

In summary, 1) if you are working toward an undergraduate degree like Psychology (or other low-earning degree), but realize that it won't pay the bills, then switch to a degree that will.  Even if it is going to take another year to graduate undergrad, it will still cost less and provide more value than going to law school.  2) If you already graduated with a low-earning undergrad degree, then think about going back to school to get a more attractive undergrad degree instead of getting a law degree.  It will cost you a lot less and you are likely to earn more.  3)  Alternatively, if you want to be involved in the law, but make much better money (on average) than going to law school, become a police officer.

UPDATE:  It's a little grim, but with a view to safety and fatality rate, someone suggested also factoring in the suicide rate for a lawyers, which is apparently 140/100,000.  Comparatively, the suicide rate for police is 118/100,000 and the combined suicide plus fatality rate for police is 134/100,000 - which is less than, but comparable to, the suicide rate for lawyers.


  1. You should have also mentioned teaching. Many states (I know Maryland) are looking for teachers with a BS/BA in a particular discipline (not education) to teach high school. If your GPA is reasonable they'll pay for a semester of educational training followed by 6 months or a year of on the job training where you're supervised by another teacher. Even if they don't pay for it, it's typically a few thousand dollars, i.e. very cheap.

    The starting salaries are not quite as good as for cops, but they're on par with business admin or accounting. Plus, these jobs are stable, in demand, and you get holidays (possibly summers) and vacations. I'm pretty sure most have a retirement/pension also. Good route to go if you want a less dangerous job than police officer.

  2. Alton - Thanks! That's another great option!