The Law School Game

From time to time readers accuse me of being too negative about law school.  They exaggerate.  I do not espouse a blanket “don’t go to law school” line.  Law can open interesting and rewarding career paths, provide intellectual stimulation, and enable a comfortable lifestyle.  The key word in the previous sentence is “can.”  I did not write “law will open . . .”  Over the past decade increase in the number of lawyers, outsourcing of legal jobs, technology, and the recession have all changed the economics of law practice. Prospective lawyers must weigh the cost of law school with the benefits they can reasonably attain.  The number of recent law grads who attain annual salaries greater than $150k is small.  The number of recent law grads of lower-ranked schools who attain such annual salaries is minuscule.  The number of law grads who struggle to repay law school loans is alarming.  The number of disenchanted lawyers whose mantra is “don’t go to law school” is discouraging.

Am I being too negative?

Prospective law students must add this New York Times article to their due diligence:  Law School Economics: Ka-Ching!   Some excerpts:

WITH apologies to show business, there’s no business like the business of law school. The basic rules of a market economy — even golden oldies, like a link between supply and demand — just don’t apply. Legal diplomas have such allure that law schools have been able to jack up tuition four times faster than the soaring cost of college. And many law schools have added students to their incoming classes — a step that, for them, means almost pure profits — even during the worst recession in the legal profession’s history.

The article focuses on “the strange case of New York Law School and its dean, Richard A. Matasar.”

For more than a decade, Mr. Matasar has been one of the legal academy’s most dogged and scolding critics, and he has repeatedly urged professors and fellow deans to rethink the basics of the law school business model and put the interests of students first . . . Given his scathing critiques, you might expect that during Mr. Matasar’s 11 years as dean, he has reshaped New York Law School to conform with his reformist agenda. But he hasn’t. Instead, the school seems to be benefitting from many of legal education’s assorted perversities. 

N.Y.L.S. is ranked in the bottom third of all law schools in the country, but with tuition and fees now set at $47,800 a year, it charges more than Harvard. It increased the size of the class that arrived in the fall of 2009 by an astounding 30 percent, even as hiring in the legal profession imploded. It reported in the most recent US News & World Report rankings that the median starting salary of its graduates was the same as for those of the best schools in the nation — even though most of its graduates, in fact, find work at less than half that amount.

It doesn’t get better.

Screw the Rankings

Anyone who has read my blog posts or asked my advice about law school has heard my pitch:  it’s better for one’s prospects to get high grades than to go to a high-ranked school.  A recent study shows I didn’t make this up.  As reported in the WSJ Law Blog article “New Study:  Forget the Rankings, Just Bring Home Straight A’s,” research by law professors Richard Sander and Jane Yakowitz found that

performance in law school – as measured by law school grades – is the most important predictor of career success. It is decisively more important than law school “eliteness.” . . . Since the dominant conventional wisdom says that law school prestige is all?important, and since students who “trade?up” in school prestige generally take a hit to their school performance, we think prospective students are getting the wrong message.

I’ll repeat long passage from the report, quoted in the Law Blog:

As an illustrative hypothetical, imagine an average student (GPA 3.25?3.5) at 47th ranked University of Florida . . . [W]e can predict how her earnings would be affected under various counterfactuals. If she had attended 20th ranked George Washington University, her grades likely would have slipped to the 2.75?3.0 range, and her salary would drop considerably (by 22%, all other factors held constant.) Even if she had managed to get a spot at 7th ranked UC Berkeley, where the tier premiums are highest, her grades likely would have fallen into the 2.5?2.75 range, and her salary would be 7% lower. On the other hand, if she had attended 80th ranked Rutgers, she probably could have improved her grades to land in the 3.5?3.75 range, and earned a 13% higher salary.

Why is this so?  Sander and Yakowitz didn’t study the cause and speculate about the relationship between improved academic performance and self-confidence.  A more plausible explanation to me is that every legal job market is filled with lawyers who did not attend “elite” schools.  They know from personal experience that a student who graduates at the top of their class from a lower-ranked school is hard-working and smart, two ingredients in the recipe for a damn good lawyer.

US News Speaketh

A headline that hardly needs a story attached:  US News Warns of Tough Times for Law Grads; Expert Says ‘It’s Just Like the Lottery.’ This ain’t news but since it comes from Rankings Mania Central it will have legs.  Jobs are down, tuition is up, loans are harder to repay.  Among the grim tidbits:

According to a separate “Tips and Stats” article, first-year associates at large law firms can expect to make $106,500 to $131,250, down 5.1 percent from last year. At midsize firms, associates can make between $71,500 and $100,750, and at small firms they make make $49,750 to $73,000.