Thursday, October 27, 2011

Allowing Non-Doctors To Perform Surgery

When I see articles about allowing non-lawyers to practice law (like this one) 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. 

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?

Wednesday, October 26, 2011

Inching In The Right Direction

It'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".)

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 (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).  However, job placement odds for those graduating in spring 2012 are likely to be slightly better than 2011.

Sunday, August 28, 2011

What Do College Students Really Want - And Can They Get It From Law School - Part 4

In Part 1 of this series, we discussed how most college students really deep down want a personal balance of four things - 1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time.  But can working as a lawyer really provide these things?  In Part 2, we took a look at the Money factor 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.  In Part 3, we took a look at the Job Security factor 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.

Thursday, August 18, 2011

When Is A Default Not A Default?

AboveTheLaw (ATL) had a post today entitled "The Student Loan Bubble: Only Stupid People Will Be Surprised When It Bursts".  The post derives from this Huffington Post article 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 LawSchoolTuitionBubble (LSTB) has been calling attention to this for some time and his most recent post on it suggests that the total numbers may be even greater.

Wednesday, August 17, 2011

Overvaluing a Law Degree

Matt over at The Law School Tuition Bubble does a good job with research and analysis.  In a recent post entitled "Another Day, Another Study Overvaluing A Law Degree" 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).

Monday, August 15, 2011

What Do College Students Really Want - And Can They Get It From Law School? - Part 3

In Part 1 and Part 2, we discussed how most college students really deep down want a personal balance of four things - 1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time.  But can working as a lawyer really provide these things?  In Part 2, we took a look at the Money factor 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.

Friday, August 12, 2011

A Tier 1 Law Professor Admits Law Schools Are Scamming Students

As reported by AboveTheLaw and appearing on InsideTheLawSchoolScam 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 Tier 1 Law Professor Admits Law Schools Are Scamming Students.

The Professor has about eight posts so far - and man are they good.  He really comes out swinging.  Let's look at them below.

The New Data That The ABA Is Asking For Is Good, But Not Great.

I previously discussed this here. Also, 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.

NALP Objects To The New ABA Employment Data Rules, But Then Makes Up

First, the NALP was riled by the ABA plan to collect better employment date for law students 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, they then agreed to work together.

Cooley and NYLS Get Sued

Cooley and NYLS got sued
This brings the total number of law schools that have been sued to three including Thomas Jefferson School of Law.  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.
More coverage.  Even more coverage.

Also - there have been a lot of developments lately, so I am going to do a bunch of little posts.

Monday, August 8, 2011

What Do College Students Really Want - And Can They Get It From Law School? - Part 2

In the previous post, we discussed how most college students really deep down want a personal balance of four things - 1) Money, 2) Job Security, 3) Appealing Job, and 4) Free Time.  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.

Thursday, August 4, 2011

What Do College Students Really Want - And Can They Get It From Law School? - Part 1

When 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" (really?  REALLY?) 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 the real reasons.  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.

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 really want - and whether they can get it from law school.

Tuesday, August 2, 2011

No More Subsidized Stafford Loans - Debt Bill

I just wanted to call attention to this aspect that was part of the Debt Ceiling Bill that has now been signed into law - and as reported by AboveTheLaw - no more subsidized interest for grad student loans after July 2012.
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.

What's the impact going to be on law students?  Well, the Stafford Loan rate is currently 6.8%, 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

Consequently, for almost all students, law school just got $3,628 more expensive.

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.

If it wasn't already apparent, going to law school AT THIS TIME is a truly rotten deal for almost all law studentsOnly about 1 in 20 really make it work.  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.

Monday, August 1, 2011

New Associate Hiring - 2010 Survey and 2011 Projection

American Lawyer is now confirming what just about everyone already knew - job offers for summer associates were way down in 2010 as compared to 2009 (about 33%).  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.

Best and Worst States To Make A Living

MoneyRates has a pair of interesting articles - the 10 best states to make a living - and - the 10 worst states to make a living. To calculate the lists, they took into account the following and then calculated an adjusted-average income for each state:
  • Average state wages
  • State unemployment rate
  • State tax rate
  • State cost of living
Guess which state is the best to make a living?

Friday, July 29, 2011

Deans Have Limits, Too

I wanted to draw attention to this article on ATL 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.

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.

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.

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".

Why The ABA Accreditation Committee Won't Lead - Part 2 - The Fix

Hmmm.  In this previous post, 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.

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 they have improved many important changes in their law school questionnaire.  Read on to see some of the changes and the potential impact.

Thursday, July 21, 2011

Why The ABA Accreditation Committee Won't Lead - Part 1 - The Problem

There's a great article on AboveTheLaw 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.

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.

Tuesday, July 19, 2011

Everything Sunny All The Time Always

In my most recent post, I referenced an editorial from the National Jurist - and something from that editorial has really stuck in my craw, especially in light of their recent "everything sunny all the time always" article about how law students today enjoy a better standard of living than 10 years ago.

More specifically, the most recent editorial states:
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.
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.

Monday, July 18, 2011

Law Graduates Today Vs. 10 Years Ago

There's an somewhat misleading article and accompanying editor commentary at the National Jurist.  In the article, they assert that recent law grads enjoy a better standard of living than 10 years ago.  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 the editor commentary appears to temper that assertion a great deal (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.

Tuesday, July 12, 2011

Summer Associates - "Clients" Not "Bosses"

In my previous post, 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.

Friday, July 8, 2011

Summer Associates - Know Your Client

I 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.

Monday, April 4, 2011

Recurring Expenses Will Bleed You Dry

A colleague forwarded me this article in the WSJ entitled "ROI: Is the iPad 2 Really Worth $2,000."  In it the author realizes that when he uses his capital to buy the iPod, the capital is no longer available for investing.  Consequently, the cost to him is not only the $500 up front cost, but all of the return that he would have made on the invested $500.

However, far more important is the insidious impact of recurring expenses in in drastically reducing the amount of money that you will have available for retirement.  For example, consider a $100/month cable bill - if the money was instead invested (even at a fairly conservative rate of 8%) then after 35 years you would have $100,000.

A $400/month car lease?  $400K after 35 years.  A $50/month telephone bill? $50K after 35 years. So what do we do about these recurring expenses?

Thursday, March 17, 2011

"Right-Sizing" Law School Admissions

As reported in the Wall Street Journal, and on the ABA site, applications to law school have dropped 11.5% - to the lowest level since 2001. There's also a post over at Jobless Juris Doctor.  But what does this mean for the future?

Monday, March 14, 2011

"Stability" And Short Memories

I was talking with a law student recently and they indicated that what they really wanted in their law career was "stability."  Consequently, their plan was that they were only going to consider working at the largest of law firms because the larger law firms "never go out of business".   (Obviously, this was a 1L because you can see that they had no idea of the actual supply/demand of the hiring market and that they would be lucky to get any job whatsoever.)

When I looked skeptical, they said "Seriously, I bet you can't name one large law firm that has gone out of business in the last 10 years."  I responded instantly with "Brobeck."  They said "What?  I never heard of that firm!" (I think that they thought I was misleading them.)  I replied "It was a 900-person firm that went down in the dot com crash."  "Well OK," they said, "but I guess you can't name three!"  To which I replied "Jenkins, Altheimer, Testa, Thelen - and there are a bunch more."

I can understand where the law student was coming from - after the real estate crash and the associate layoffs, I can see how the desire for "stability" has replaced in many instances the desire for "top dollar".  However, the student apparently has a short "memory" for recent events in the law firm world.  Let's take a look at the associate's wrong assumptions and look at some aspects that they can be on the lookout for to help increase the stability of their career.

Monday, March 7, 2011

Increasing Return on Education Dollars

Paul Krugman's article in Sunday's New York Times is generating a lot of talk.  Krugman points out that a lot of jobs considered "white collar" are subject to automation and are currently being outsourced.  From this point he extrapolates that "education is not the answer", but instead the answer is to give more bargaining power to unions.  

Over at Restoring Dignity To The Law, J-Dog emphasizes that although increasing education may have led to a better life 40 years ago, the same may not hold true now.  He also mentions that education has shrinking economic returns.  Over at Law School Tuition Bubble, Matt also references the article.

Is Krugman right?  Should we just encourage our kids to be janitor with strong unions instead of going to college?  More below.

Saturday, March 5, 2011

Law School Song

On the lighter side, someone recently sent me a link to this hilarious video.  Could this be good, cost-effective advice to provide an alternative for potential law students? Heh Heh.  Woof!

Wednesday, March 2, 2011

Stop Exploiting Foreign LLM Students

As we all know, law schools are reporting misleading statistics (especially regarding employment) in order to convince students to spend hundreds of thousands of dollars obtaining a law degree.  This leaves many students with hundreds of thousands of dollars in debt and no job or any other realistic way of paying off the loan.  For those that do get a job, they can look forward to a lifetime of crushing debt - for example, if they owe $200K at an average interest rate of 8% (which is pretty realistic for a law school with a $40K/year tuition) then the first $16K/year that they pay goes to only pay interest - if they are in the 28% bracket, that means that the first $22K they earn goes to loans.

That's bad - but it could be even worse.  Imagine that the promises were even higher - this misleading statistics even worse - and the debt even more insurmountable.  That's the reality for most foreign LLM students. 

Tuesday, March 1, 2011

Public Unions And Competition

Most people are aware that the Wisconsin Governor has taken on the Wisconsin public unions.  The Governor wants to take away the rights of unions representing government employees to ask for more than the rate of inflation as an increase in salary.  Also, they would have to pay more for their health insurance and more toward their pensions.  Finally, government jobs would no longer be able to force anyone who gets hired to automatically join the union and pay union dues.  The Wisconsin situation raises a whole host of issues and there is a lot of misinformation on both sides.  Let's take a closer look below.

Monday, February 28, 2011

Getting A Good Deal Buying A New Car - Part 3 of 3

In Part 1 of this series, I revealed that my wife and I decided to get a new car and decided to engage in a competitive bidding process with several local dealers.  In Part 2 of this series, I described how the bidding process worked out in practice.  In this final Part, I'll tell you about something that blew my mind about the purchasing process, as well as some last-minute pressure from dealers and some bottom line thoughts!

Tuesday, February 22, 2011

One Way To Get A Good Deal Buying A New Car - Part 2 of 3

In Part 1 of this series, I revealed that my wife and I decided to get a new car and that I had sent a request for a quote to nine local dealers using Yahoo Auto - and asked a salesman who worked with us for a quote.  I told everyone that it would be a competitve bidding proceed - and it was!  Here's how it turned out!

Sunday, February 20, 2011

One Way To Get A Good Deal Buying A New Car - Part 1 of 3

A few years ago, after 10+ years in practice, I finally bought my first new car.  Previously, I had only driven used cars in order to save money, but this new car was primarily for my wife and she was more concerned with a potential breakdown then I typically am.  She was especially interested in a Honda that was known for reliability.  I agreed to buy the new car, but I wanted to get the best deal that I could in the shortest amount of time - remember! every hour spent on the car purchase is an hour less billing/another hour longer you will have to work.  Also, I didn't feel too badly about buying this model new because this model of Honda typically holds its value well - as I checked on Kelley Blue Book.  I'll relate my experience below as one way a busy lawyer can try to get a good price with a minimal investment of time.

Tuesday, February 15, 2011

Tiny Green Shoots In Legal Hiring

First let me say that I still think that the supply of new law grads is far too great for the number of available jobs.  There was already somewhat of an issue with that in 2007, but the economic crisis of 2008 really brought it to a head.  Law firms cut hiring by 80-90% while the number of students attending law school shot up about 30-40% - the classic recipe for disaster of fewer jobs and more people looking for them.  Stop-gap provisions that firms implemented such as "deferrals" only pushed the problem down the road.  I'll make no bones about it - for current law students the situation is pretty grim.