Squeezed

Last night I attended a student-faculty social event sponsored by the SMG senior class–beer (them), club soda (me), and nachos in a Kenmore Square bar.  (Had the Sox won the seventh game of the ALCS this bar and the rest of Kenmore Square would have been shoulder-to-shoulder with fans heading to Fenway, and I would have left shortly before 8:00 PM to take my seat in Box 86 Row G.  But the Sox didn’t win the seventh game and I drove home.)  The students attending, being seniors, are facing the worst employment market in recent memory.  Finance concentrators face drastically fewer jobs than existed two months ago when many completed Wall Street internships, marketing, operations, and IS concentrators face tightened hiring budgets, and accounting concentrators face–well, I don’t know what they face.  I haven’t talked to any recently.  Gallows humor and anxiety are the plat du jour.

Gallows humor, anxiety, and thoughts of graduate school.  It’s law-school application season, I’m working through my stack of LSAC recommendation letters (this weekend’s goal is to write four), and I’m talking about law school almost daily.  A number of students for whom law school was a possibility in a few years have penciled it in for September 2009, and others are seriously considering it for the first time.  Common sense says that the number of applications for next year’s 1L class will be up.  Competition, already intense, will be fierce, squeezing applicants from their reach schools.

Those who choose law school because the job market is bad are betting that they’ll graduate to better prospects in 2012.  As I’ve written many times the stratification in the legal profession means that a small number of law grads each year compete for well-paying BigLaw jobs while many struggle to earn enough to cover their student loans.  No one goes to law school expecting to finish in the bottom half of his or her class but, of course, the math dictates that every other law student will land there, where employers don’t recruit.  The legal profession is not recession proof.  In A Grim Verdicit Awaits Law Grads the National Law Journal reports “[t]he number of legal jobs nationwide is steadily declining . . . Jobs in the law sector shrank by 2,000 in September — the fifth consecutive month of losses. The legal work force of 1,165,100 was down by 1.15 percent from a year ago, when the industry employed 1,178,600 people.”  As I was writing this another headline (also from the National Law Journal) popped into my email inbox:  Grim Report Advises Law Firms to Prepare for a Long, Painful Slide.  Did the NLJ get a special on the word “grim?”

What to do?  Some prospective law students should consider an alternate course following graduation next May.  One student I spoke with last night is considering Teach for America.  It is already quite competitive and becoming more so, but it and similar programs allow one to defer law school, gain life experience, grow older (life experience and maturing being consistent with my mantra that there should be a gap between college and law school), and, most importantly, do something worthwhile for others. “Helping others” is not a career objective I hear often from my students but this economy may force some to re-evaluate their choices.  My decision to attend law school and my orientation to law were shaped by my college and post-college experience doing prisoner’s rights and legal services work.  It would not be a bad thing if more of our bright, ambitious students spent time in public service work.

Shed a Tier

What Law School Rankings Don’t Say About Costly Choices by William D. Henderson and Andrew P. Morriss (The National Law Journal, 16-Apr-08) provides empirical data that reinforces the lessons I’ve learned from my anecdotal experience: “Some students should consider lower-ranked schools that offer more grants, better opportunities.”) (Aside: Today a student asked that I explain what I mean by anecdotal experience. Anecdotal here means “not based on objective research or systemic collection of facts but on what has happened to me.” In one sense “anecdotal experience” is redundant, because we learn most of life’s lessons from whatever events cross our path, not from double-blind surveys. My life experience tells me that white cats with blue eyes are deaf because I have personally known two and heard of other deaf, blue-eyed, all-white cats. I would (and probably have) assert at a dinner party that white cats with blue eyes are deaf. I would not assert this as fact to the International Conference of Cat Breeders and Genetic Biologists without conducting more conclusive research.) The authors summarize the role of U.S. News and World Report rankings on law school applicants, discusses the gap between the demand for “sophisticated corporate legal services” and bread-and-butter non-corporate work, and provide data on the “bimodal” income distribution of law graduates: [T]here is a heavy concentration of salaries in two distinct ranges . . . out of 22,684 starting salaries reported for 2006, 4,809, or 21.2 percent, were in the $125,000 to $145,000 range . . . In 2006, 8,577 reported salaries, or 37.8 percent, were in [the range of $40,000 to $55,000.] The payments on $100,000-plus worth of law school debt look quite different to someone earning $50,000 than they do to someone earning $160,000 a year.”

After discussing some of the reasons for the dramatic increase in corporate-firm associate salaries the authors concluded that “only the highest-ranked students at a broad swath of regional law schools can hope for access to these high-paying jobs. [By “regional law schools” the authors, who state that in their estimation there are fewer than 20 national law schools, mean “most law schools.”] Slavishly following the U.S. News rankings will not significantly increase one’s large-firm job prospects. And the excess debt that students incur is likely to undermine their career options.” They review hiring statistics for the top National Law Journal 250 feeder schools, noting that “[b]elow school No. 26 . . . a graduate has a less than one in five probability of starting his or her career at a large law firm. If 80 percent of law school applicants are convinced that they will make that 20 percent cutoff, three out of four are destined to be disappointed.” They conclude that prospective law students should attend a regional law school in the geographic area in which they want to work and “use their entering credentials to negotiate for a substantial tuition discount.”

Excellent advice. Read the entire article.

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PS:  If you are interested in this article you should read the others linked at The Blogosphere’s Advice for Current and Prospective Law Students.

More on the Legal Divide

In anticipation of my Thursday evening participation in a panel discussion on law school and the legal profession (6:30 PM in the BU School of Management auditorium), I recommend a post from Carolyn Elefant of the Legal Blog Watch Alert that reiterates themes I’ve addressed many times on this blog. Titled “Still Two Sides of the Bar in the Legal Profession” the post argues that:

  • “the upper fourth of earners in the legal profession have continued to prosper, while the bottom three-fourths have lost ground”
  • “it’s harder for those who don’t find large-firm jobs to make a living because the rising cost of legal education means that smaller paychecks don’t stretch as far”
  • “at all ends of the spectrum, there’s dissatisfaction. Lower-earning lawyers stress about finances, while those earning big paychecks stress about long hours or lack of meaningful work”

Read her post if you are considering law school. It’s a decision one should make with eyes wide open.

Real Player Warning

Stopbadware.org–organized Harvard Law School’s Berkman Center and the Oxford Internet Institute of Oxford University–warns about the privacy failings Real Player 10.5 and Real Player 11.0. The former does not alert the user that its message center feature will display pop-up ads if the program is not registered, while the latter secretly installs the Rhapsody Player Engine and leaves it in place if the user uninstalls Real Player 11.0. For years I’ve avoided Real Player products as much as possible because, in my experience, they are intrusive and persistent. I gave the company another shot by using Rhapsody for a while but it was a constant headache. I had to uninstall it a few times and in each case it was like cleaning up after a terrible roommate who leaves dirty plates in the living room, smelly socks on the kitchen table, and wet towels on the bathroom floor. I canceled the account after a few rounds of this. Brian Krebs reports the story and proposes some alternatives to Real Player.

Don’t Go to Law School

I’ve posted before that prospective law students must honestly consider their prospects for success in law school because, unless they attend one of the very top-ranked schools, their job opportunities will be limited if they are not ranked at the top of their classes. The Wall Street Journal Law Blog recently interviewed “law school naysayer” Kirsten Wolf, a 32-year old BU law graduate. Wolf went to law school a few years out of college believing that she would obtain a marketable skill that would justify the cost of borrowing to pay tuition. In the fall of her second year, when she realized her B+ average was not good enough to land her a summer associate position with a large firm, she began to question her decision. Already $45,000 in debt she stayed, graduated in 2002, passed the Massachusetts bar, and found no law jobs waiting. She went back to the company she worked for before law school and then eventually moved to New York where she landed a job she enjoys, as an office manager for a literary agency. She is paying her $87,000 student loan debt over 30 years–which means she’ll still be paying for law school as she approaches her 60th birthday. In Wolf’s words:

I’m on a one-woman mission to talk people out of law school. Lots of people go to law school as a default. They don’t know what else to do, like I did. It seems like a good idea. People say a law degree will always be worth something even if you don’t practice. But they don’t consider what that debt is going to look like after law school. It affects my life in every way. And the jobs that you think are going to be there won’t necessarily be there at all. Most people I know that are practicing attorneys don’t make the kind of money they think lawyers make. They’re making $40,000 a year, not $160,000. Plus, you’re going to be struggling to do something you might not even enjoy. A few people have a calling to be a lawyer, but most don’t.

Legal Blog Watch Alert picked up Wolf’s story and also reported about a lawyer who auctioned his law school diploma on eBay. The post notes the lack of discussion on academic law blogs about whether to attend law school.

For years I have advised students that exceptional performance in law school is more important than where you go. Wolf’s story bears this out. She must have been a good student and gotten good LSAT scores–BU law would not have admitted her otherwise–but that doesn’t put you at the top of your class. Even at BU, which is always ranked as one of the top 25 or 30 law schools in the country, a B+, top-half of the class performance will not open the most lucrative doors. I’m seeing this again with a friend who is currently in her second year at BU. She is quite smart, works exceptionally hard, is one of the most personable and engaging people I know, and yet has been unable to crack into the Big Law summer associate track. And if you aren’t on that track after your second year of law school, your earnings horizon changes dramatically. Yet had Wolf gone to a lower-ranked school and finished at the top of her class–say in the top 10 or 15 places, or top 3.00%–odds are that she could have obtained a high-paying job. Finishing in the top 3% of one’s law school class does not happen without brains and lots of hard work. That’s why those at the top of their class will still merit a look from the most selective employers, because the employers know what it takes to get there.

I’ve always taken a laissez-faire approach with prospective law students. I’ll be honest about the risks and pitfalls of a legal career and then support the student’s decision to attend law school notwithstanding my warnings. I’m now rethinking my approach. Should I recommend a student who has not shown the academic ability to finish in the top five percent of his or her law school class?

The Purpose of Law School II

Recently, articles about law school and the legal profession have captured my attention more than is customary. I’m not certain why. There are obvious reasons: I’m nearing the bottom of my pile of to-be-written LSAC recommendation letters, I’m talking often about law school, I’ve had retrospective discussions about law careers, and Damages recently concluded its initial season. Uncanny how that show captured the essence of my first year of practice in the municipal finance department. Murder, intrigue, double crosses, nights at the financial printer’s proofreading offering statements . . .

This time I’ll point to Legal Blog Watch, where Carolyn Elefant has done all of the heaving lifting in a post titled Law School Rankings to Students: Don’t Tell Me What You Want, What You Really, Really Want. The entire post and its linked materials (except the Spice Girls’ lyrics) are worthwhile to those interested in law school. Briefly, law students rank “quality of teaching, bar passage rate, placement rate at nine months, practical skills training and faculty-student relations” as most important in evaluating law schools. The U.S. News law-school rankings don’t “consider quality of teaching, practical skills training or faculty-student relations” and give less weight to bar passage rates and placements. U.S. News bases 25% of its rankings on reputation among law professors and deans, 15% on reputation among lawyers and judges, and other factors declining in significance.

Trying to put the U.S. News Rankings into perspective for prospective law students can be frustrating. The rankings promise to impose order on the difficult choice of selecting a law school but like many analytic tools, people wield them without understanding how to do so or try to make them do more than they can. There’s just something irresistible, atavistic even, about numbered lists. I recall a student deciding between two schools who was convinced that a school ranked 63rd by U.S. News would provide him with a materially better education and job prospects than one ranked in the mid-70s. That’s nonsense. Finish at the top of your class in either school and you’ll have excellent job prospects in their markets. Finish in the bottom half of your class and it won’t matter if your school is ranked in U.S. News’s top 20. Many wanna-be law students forget that half of them will finish in the bottom half of their class, at least until Lake Wobegon Law School opens its doors.

The disconnect between law students’ wants and the U.S. News ranking factors reflects the yin and yang of law school education. Does law school introduce students into analytic thinking that is the backbone of legal problem-solving or does it teach a trade? Which is more important for a law school graduate, sophisticated understanding of legal principles or knowing how to search a title? This should not be binary question; lawyers should know the how and the why of law. There are extremely smart attorneys who are flummoxed by law’s mundane, boring, and necessary details and law mill practitioners churning out form documents who can’t see the forest for the trees. Elefant agrees with a blogger who “wonders whether law student[s] are sufficiently qualified to evaluate the quality of a law school, or to know what aspects of legal education are important.” She says “the most important skills that law school teaches are (1) writing ability and (2) analytical thinking.”

I think the answer is more complicated. Recent posts have discussed the difficulties some law graduates have finding jobs that pay enough to cover their law-school loans. Many students enter law school without any clear understanding of what lawyers actually do only to discover that (1) they don’t like doing it, (2), they aren’t good at it, and/or (3) it is not at all what they expected. The practice of law is stratified, with the handful of top graduates (not all of whom graduated from the U.S. News top-ranked schools) landing the best paying jobs at corporate firms and everyone else finding their niche along the continuum from “interesting and challenging” to “mind-numbingly and soul-suckingly dull.” Learn to analyze, learn to write, but if you are in the bottom half of your class at a lower-ranked school and $150,000+ in debt, you had better come out of law school knowing how to do something besides spot issues.

BigLaw Economics

Two posts from the Wall Street Journal Law Blog:

  • Wal-Mart Memo to Law Firms: No More Rate Hikes! Drawing a line over regular increases in hourly billing rates that it believes are linked to increases in associate salaries (now $160,000 for dewy-eyed law school grads) Wal-Mart notified outside counsel ““[w]e are today announcing a moratorium on across-the-board rate increases. Until further notice, we will only consider reasonable, individual requests for rate increases for those attorneys in your firm who are performing at an exceptional level and whose experience and knowledge is adding substantial value towards meeting Wal-Mart’s legal objectives.” Next week Wal-Mart will receive a raft letters from outside counsel telling it that all BigLaw lawyers perform at an exceptional level and add substantial value, just by walking into a room.
  • Except when they aren’t. McDermott to Create a New Class of BigLaw Attorneys reports that McDermott, Will & Emery “plans to create a new tier of full-time non-partnership-track attorneys to handle lower-end tasks at lower billing rates . . . first-years now earn $160,000, but some of their work, like electronic discovery, can be done by, well, someone not worth that much money.” McDermott has not announced this the salaries for this new class, how much they will be paid, or what they will be called. The Journal’s Law Blog invited readers to submit names. Responses include “serfs,” “plebeians,” and “pond scum.” Others note that firms already have non-partnership-track positions with different annual billing expectations and advancement opportunities; they are called staff attorneys. I also suggested some names: Lawyers with a life? Parents? Passersby at the rat race? See Legal Blog Watch for more about how staff attorney positions are desirable for those seeking a work/life balance.

Thinking of Law School? Read This

A recent article in the Wall Street Journal titled “How to Cut Debt, Boost Job Prospects from Law School” (subscription required) addresses some issues raised here over the past few months about careers in the law (See Legal Careers, Not Covered by LSAT Prep, To Be* or Not to Be*, Women and the Law, Lawyer’s Life). The Journal article echoes much of the advice I give about law school; these are the highlights, reordered to my preferences.

  • Be a big fish. This is my primary piece of advice. Finishing at the top of your class at a regional law school will grab the attention of employers local employers. Unless you are extremely confident that you will place high enough in a nationally-ranked school to land the type of job you seek, going to a school where you can be a star will likely better serve your career.
  • Think about location. This goes hand-in-hand with being a big fish. “[I]n at least half of all states, at least 60% of graduates got an in-state job, according to the National Association for Law Placement, in part because most employers are more familiar with schools in their region.” If you want to find a job on the other side of the country then you should attend a nationally-ranked law school. If you will remain in the area after graduation then being in the 50th percentile of your class at a national school will not get you more interviews than being one of the top ten in your class at a regional school. The school’s alumni are likely to be well-entrenched in the local legal market and will open doors for a person at the top of his or her class.
  • Look for transfer opportunities. It is generally easier to get into a nationally-ranked school as a 2L than as a 1L. Be a big fish, excel in your first year, and you may be able to transfer to a nationally-ranked school.
  • Consider an in-state public school. “An in-state public law school costs about half as much, on average, as a private school or a public school for out-of-state residents.” If you will not attend a national law school, why pay considerably more to attend a regional school if there is a state alternative?

Lawyer’s Life

Scraps from the briefcase for prospective law students and lawyers:

Pay and Workweek Differentials by Law Firm Size from the Empirical Legal Studies blog charts the relationship between law firm size, associate salaries, and associate happiness. It reports that the median salary spread over the first eight years of the associate track amounts to $631,000 for associates in firms with 2-25 lawyers versus those with 500+ lawyers and to $524,000 for associates in firms with 51-100 lawyers versus those with 500+. It’s no surprise that big firm lawyers make more money but I’ve not seen a calculation showing exactly how much more. It also reports that almost 47% of lawyers at 500+ firms work more than 60 hours/week. The number of lawyers working more than 60 hours/week is 27.2% at firms with 51-200 lawyers, 19.4% at firms with 16-50 lawyers, 19.3% at firms with 5-15 lawyers, and 16.1% at firms with 1-4 lawyers. Last, it reports that 36.2% of those in firms with 1-4 lawyers report a very satisfactory work/family balance, compared with 31.3% in firms with 5-15 lawyers, 9.7% in firms with 16-50 lawyers, 10.3% in firms with 51-200 lawyers, and 4.9%–4.9%!!!— in firms with 200+ lawyers. I’ve summarized the findings. Read the original for more data and analysis.

Will Lawyers Continue to Exist? at Human Law Mediation blog entertains the notion that information technology and the ability to carve up legal work into discreet tasks–commoditization of legal work–will transform the profession. If you want an example read this piece from Legal Affairs: Are your lawyers in New York or New Delhi?

Last, Tax Prof Blog hashes data from the Princeton Review’s Best 170 Law Schools and rates schools in categories such as Professors Rock (BU is #1) and Students Lean to the Left (my alma mater Northeastern is #2).

How about a survey of undergraduate business school law faculty? Now there’s a niche market.