Before I do that, however, for any prospective law student reader, I want to reprise some advice from Willy Wonka and the Law Degree Factory, one of my better titles. if I may say so. Today’s law degrees will be golden tickets, economically, for relatively few of the 40,000+ graduates each year. Law can be a good career for many more, if you are thoughtful in your law school decisions and careful about financing it, certainly more careful than Michael Wallerstein and his quarter-million dollars of student loans highlighted in the Times story.
Business has a stake in the law school game because high legal fees, a concern for many businesses, are connected to the game, beginning when law schools use the allure of huge starting salaries to attract students. From the Times article:
In the Wonderland of these statistics [supplied by law schools for ratings purposes], a remarkable number of law school graduates are not just busy — they are raking it in. Many schools, even those that have failed to break into the U.S. News top 40, state that the median starting salary of graduates in the private sector is $160,000. That seems highly unlikely, given that Harvard and Yale, at the top of the pile, list the exact same figure.
The nation’s largest law firms compete for the top graduates of the top law schools using salaries that make little to no sense in the rest of the legal economy. Wall Street lawyer salaries, however, do ultimately influence Main Street lawyer salaries. Ripples of competition for talent spread even to relatively small legal markets like Denver. Even if we assume, in a law school-style hypothetical, a talented young lawyer values job satisfaction (like working with human-owned businesses, which have modest budgets for legal fees) over the greater economic rewards of slaving away for large multinational corporations, that lawyer’s debt load can limit his or her choices. From the Times article:
“I think the student loans that kids leave law school with are more scandalous than payday loans,” says Andrew Morriss, a law professor at the University of Alabama. “And because it’s so easy to get a student loan, law school tuition has grossly outpaced the rate of inflation for the last 20 years. It’s now astonishingly high.”Law firms are businesses, even though we don’t always act that way. We have to price what we sell (hours, for most of us) to cover costs and return a profit to the owners. The biggest cost, of course, is attorney salaries.
Some suggest a reduction in the number of law schools and, thus, lawyers is necessary. I’m not so sure we need to force that outcome, especially considering the number of legally underserved populations. We do need, however, much greater transparency (accuracy, if you’re a cynic) in the law schools about the employment prospects for each school’s graduates. Market forces should then help bring the cost of a legal education into line with the realistic economic benefits of a legal education.
Sour grapes have no part in this post, in case anyone is thinking that. I graduated with honors from The University of Texas School of Law. UT Law is perennially a top law school in the all-important U.S. News & World Report rankings, though I suspect its administration would love to see it move up from the tied-for-15th spot it has held for some time. I couldn’t have done it without government loans.