Considering Law School? Do the Math
Beware: It's law school application time.
Posted September 13, 2010
It's law school application time and many students (and their parents) are considering whether to go, where to go, and how to pay for it. Law school is a popular post-graduate destination, but according to an article from the American Bar Association, entitled "The Value Proposition of Attending Law School", the cost of legal education has risen twice as fast as inflation. The average law student now borrows $71,436 for public law school, $91,506 for private law school, and according to this report, "many students borrow far more than $100,000 and these numbers do not even include debt that students may still carry from their undergraduate years." And with increasing costs at law schools-- some public schools are raising tuition as much as 25%-- students will take on even more debt.
As if that isn't depressing enough, the second part of the report presents the employment prospects for law graduates. And they're not pretty- see the article I posted previously. A phrase common to business is ROI: Return On Investment-- meaning, what will you get for your investment in law school? According to the ABA's report: not as much as you might expect. Their numbers indicate that 42% of law school graduates received annual starting salaries of less than $65,000.
The New York Times Business section published an interesting article this summer on the Two-Track Lawyer Market. Based on data from an annual report from the Association for Legal Career Professionals, the Times article presents the salaries for first-year lawyers, On the surface, the salaries look good, with the mean hovering around $90,000. However, the article quickly points out that the statistics aren't telling the whole story.About 34% of lawyers have starting salaries ranging from 45K-65K; 25% earn about $160K-- and very few lawyers actually receive that average salary of 90K.
Salary surveys have to be viewed with a jaded eye- they should only serve as a point of reference. (See my previous post on this issue.) Here's what Payscale reports about lawyer salaries, and here's the federal government's report.
So if you're a college student (or the parent of a college student) trying to decide whether to attend law school or not, what do you do? Here are five tips to consider:
1. Kick the tires. You're about to make a major financial investment-- you should spend at least as much time analyzing the cost/value as you would on the purchase of a house or an expensive car. Whether you have family support, are paying your own way, or are taking student loans, law school is expensive.
- Thoroughly investigate your career options before you go to law school. Meet with your school's prelaw advisor. (Here's the prelaw guide from The University of Texas at Austin's College of Liberal Arts.) By the way, watching "Law and Order" does not count as research.
- If you haven't worked in a law firm, done a law-related internship, conducted information interviews with attorneys,or otherwise connected with the law, quite frankly you have no business going to law school.
- Research law schools thoroughly. Find out their placement rate and what their graduates earn. Remember, no one can guarantee you a job.
2. Do the math. What seems like a simple financial decision ("oh I can take on this debt while I'm young...") may have far-reaching implications. Debt can limit your career options, where you can live, and even whether you can afford to get married or raise a family. Let's do the math:
- Suppose you land a legal job after graduation paying $65,000 (which sounds good). First, assorted taxes will take about 25% of your salary, so now you're earning about $4000 per month. (And if you're working 60 hours a week-- not uncommon in the law-- your net hourly wage is about $16.00/hour).
- Now let's say you have $100,000 in student loan debt at an average interest rate of 6.8% (current Stafford rate), and you plan to pay it off in 10 years. That means you'll be paying about $1150.00 a month for the next 10 years-- making your actual law school debt about $138,000. (If you lower your payments by extending the loan for 20 years, your overall debt for law school becomes $184,000.)
- Now your monthly income is $2850, from which you will pay rent, food, insurance, retirement, car payment, etc. This can be done of course-- many people live on much less money. But this is not a "wealthy lawyer" figure. (And I've heard worse-- lawyers taking contract work, unable to find work at all, even lawyers who married other lawyers and now have twice the debt, etc.)
3. Know why you're in law school. Go to the best school you can afford and get the best grades. Do everything you can to be the best candidate for jobs.
- Decide what field of law you want to enter and the type of practice where you will work. Are you interested in family law in a rural setting? Becoming a partner in a large city-based firm? Practicing intellectual property law for a computer firm? Becoming an attorney for a university? The earlier you acquire the necessary knowledge, experience, and connections related to your interests the better.
- Keep in mind that the highest salaries usually come with the longest working hours and pressure. Job choices in any career field are often a compromise between money, location, and time.
4. Blog and Tweet. Contacts are everything, and social media and networking are becoming increasingly important in finding a legal job, just as in other fields. Your online presence will be noticed by potential employers so become an expert in social media and networking. Check this article out for some excellent advice.
5. Develop experiences that highlight your emotional intelligence-- EI skills are highly needed in the field of law. This article from The Colorado Lawyer presents a nice overview. And here's an interesting YouTube about emotional intelligence and the practice of law. Finally, here's a great book on emotional intelligence in the workplace.