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04 September 2007

Comments

J

This is so true and I live this every day - even almost 5 years out now, with an LL.M. from a top rated program, I can barely afford a car and my rent. And the jobs I would have liked to do, public interest gigs and giving back to the community, like the one I was offered through Americorps, or the judicial clerkship, I quite literally cannot afford to take.

10 years out

Prof. Henderson - loved your response to Loyola 2L.

The chart is really interesting. Have you compliled historical data that shows what it would have looked like 10 years ago?

From my vantage, it seems that the tier one schools have raised tuition in line with the salary increases in Biglaw during the past decade and other employers have not been able to keep up. When I got out of Northwestern in 97, Chicago firms paid $80k and tuition was about $20k. Today the top firms pay $160k and tuition is $40k - simple doubling.

While the internet didn't give every law student a soapbox in '97 I don't recall the same level of gloom and doom from students not headed to biglaw back then. While the debt levels were still high then, it wasn't as crushing and the difference between Biglaw and all other salaries wasn't so stark.

You chart should be included in the LSAT registration package - kids need to see this data before they even start studying for the LSAT.

Keep up the good work.

IUB 2L

This is very bad news for Sallie Mae. I think they anticipated me being able to pay them back for the loans I have taken out. Oops!

Busting UGA Troll

Georgia residents usually get merit-aid equal to the tuition difference between Emory and UGA. Career prospects are not the same. Ask anyone who practices in a major coastal market (NY, DC, LA, Bay Area) whether a UGA grad or an Emory grad has the same chances of employment in their market. I'll grant you that maybe they are the same in Atlanta. BTW, I was nowhere near the top 25% of my class at Emory and I practice at a major firm in a major market. You obviously went to UGA and probably now practice somewhere in Savannah.

Gray Proctor

12:49 - it's prestige, not profit.

Jay

I believe that this bi-model distribution may be slightly affected by the temporary one year judicial clerkships that 9.5% of people take. That would significantly alter the amount of people making between 40-50k. Most of those people will go on to make substantially more money the following year.

That being said, it is still a disturbing trend, though I wonder what it looks like 5 years down the line, and if it corrects itself.

Anon

Am I the only one disturbed that numerous comments have assumed that law schools are just businesses trying to make a profit. Wait a second, (virtually all) law schools are non profit entities. If they want to behave like businesses, they should give up their tax-exempt status. I thought universities were expected to have other objectives besides whatever the non profit equivalent is of maximizing profit.

Bill Henderson

No cost of living adjustments. Note that I find many students are too quick to cite that factor. Sure, it costs a lot more to live in DC or NYC. But those firm jobs give exposure to deals and matters that enhance one's human capital, thus increasing an associates long term career options (and thus earning power). General counsel of major corporations, for example, typically did stints in major markets. So the big picture is complex.

Salil

While I know Bill is aware it, the thing people haven't pointed out is the opportunity cost of law school attendance. Sure, $85K in debt is bad, but the unemployed law graduate also gave up the chance to build financial or human capital in another area.

Alex

Could you tell me whether that chart "corrects" for cost of living adjustments?

Emory

Tisk Tisk UGA Buster...I'm not a UGA troll, or an Emory hater...my point, put simply, was that Emory is far outside the metric because it, and its non-elite private peers, unlike the elite schools, offer little chance to those outside the top 25% of making enough to justify the 150k plus debt load...ie., Emory law (and everyone below)is probably not a sound financial decision for 3/4 of the student it spits out each year...because most students could earn close to the average salary of its grads by simply entering the job market out of undergrad and excelling, with out incurring the debt.

UGA offers similar job prospects as Emory at 10k a year for instaters, and 28k for the few out of staters that go there, and thus, is not a much of an unsound dice roll...that's all.

Law Student

I'm curious about how the graph might look over time. Most of the law school graduates reporting high starting salaries will not stay in those positions for more than a few years. What do they end up making afterwards? In the end, is it substantially more than what those on the left of the chart above earn over the course of their careers?

I realize that law schools probably don't keep track of that kind of data, but it would be highly interesting to know.

Thinking about law school

Thank you!

Thinking about law school

Professor Henderson:

Thank you for the insights on pay distribution and the report link. I wonder where academics fall in that range? I imagine it's somewhere in the "death valley" area; but, if you would be willing to provide some insight about legal academia, I would greatly appreciate it. Thanks in advance.

P.S. I'll be reading your SSRN articles on the LSAT later this evening.

Athena's Mom

Am I the only person who entered law school not thinking about median salaries and the like?

In my view, law school gave me the knowledge and credentials I needed to enter into the profession. It was in no way a ticket to great wealth.

anon

Joe hits right on the point. Too many students only begin to understand the job market generally and the law job market specifically after they have committed 3 years and tens of thousands in debt.

David's point about irrationality is part right too. The entering students just don't have enough life experience yet to have realistic expectations. Not really irrational, just uninformed, but looks like irrational behavior all the same. (it is entirely rational that an uninformed person would make a poor decision).

I also think that this same lack of information creates the conditions for the large exodus from law firms after year 3-4. They hit 27-28 years old, and like all 27-28 year olds, they realize a few things about life and need to change direction. Only now they have massive debt.

allen

Most of the state clerkships are the equivalent of clerking for the local traffic court. They take tier 2 grads with less than stellar grades and these people have a nightmarish time getting a firm to hire them when their clerkship is over because everyone knows they didnt do anything impressive for the last years. Federal clerkships and the prestigious state clerkships are a minority of all clerkships. NJ couldnt even fill all their clerk openings 2 years ago.

joe

I wish I had seen this before I started law school. As an unemployed recent grad with 90k in debt and waiting for bar results I just wish I could return my degree the way you return a pair of overpriced jeans you realize were a mistake.

Anonymous

I think it should also be pointed out that there is a self-reporting bias that may not be reflected in the chart: I would imagine graduates are more likely to self-report their income (since reporting is voluntary) when (1) they have a job and (2) they make more money. I also think some students may be inclined to report that they make more than they actually do.

Also, I attended a law school that claimed to have a high job placement rate with expected starting salaries matching almost any school in the country. I think these statistics were helped by the fact that the employment surveys were done right at graduation when the vast majority of those who even knew what they would be doing post-graduation were those with jobs at biglaw firms that they secured the prior summer, and their attendant high salaries. Those without jobs (or low paying ones) were obviously unlikely to report.

Busting UGA Troll

Nice try UGA troll. Emory is ranked the same as GW at 22 so don't imply Emory is far outside of the top 15-20 metric you impose. Why don't you check out UGA's placement outside of Atlanta versus Emory's and tell me which one has the better placement.

Jake

What about a place like Tulane, who USNEWs reports as having the highest median salary in the nation (with a small percentage reporting.) The school does not place better than everyone else, yet some poor future law student could be misled by these false figures.

At the same time Tulane places all over the nation, with a reach greater than the better ranking Emory. The school claims that over 1/3 of the attending students are offered $100,000+ jobs. Is Tulane's ranking off? Are they an anomaly? Is it all smoke and mirrors?

It is very difficult for a future student to wade through these numbers to figure out the facts.

Let's all be honest

The message that needs to be conveyed clearly is that, outside the top 15 or so schools, attendance becomes an extremely risky proposition, especially where private schools are concerned.

Take Emory Law (or insert a private school of your choice outside the top 15-20: tuition approaching 40k a year, job prospects worse than its cross state rival UGA, and no placement power to speak of outside Atlanta for those outside the to 20%- this means that 4/5 of the class stand to graduate with six figure debt and no shot at making the big bucks...not great odds!

David

One would think that this sort of information would lead to a market correction. Lower-tiered schools should have enormous difficulty attracting students at high tuition rates. This should ultimately drive them to improve or leave the field.

I wonder if this does not happen not because students don't understand the tier system, but because nobody who applies to law school thinks they will be anything but number one in their class. In other words, are the students acting irrationally? The law schools are not (if they are in it for profit).

Also, the Illinois, Indiana, et al. students are making a great decision if they (a) cannot get into Harvard etc. and (b) can pay significantly reduced in-state tuition. I am an Illinois grad and only later realized how great leaving law school with $30,000 in debt (eleven years ago) was compared to so many others.

anon

10:04, There's also an under-reporting problem. A lot of low paid law students don't respond to the salary surveys. One school is known for making it administratively difficult, for people who didn't get a job through OCI, to report salary information (OCI is where the top students get jobs.)

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