Law Students in Debt and in Doubt – Spread the Word
Mr. ToughMoneyLove enjoys blogging but makes his living practicing law. I also teach part-time at a local top 20 law school. I hope this allows me to speak with some authority on the topic of excessive borrowing and unreasonable financial expectations of law students and law student wannabes. If you or a friend/family member are a lawyer wannabe, please carefully consider what you are about to read.
Why is this a suitable topic for discussion on a personal finance blog? Two reasons. First, it brings home the point that the economy is hitting the legal profession hard. Second, for reasons that continue to amaze me, thousands of young adults think of a law degree as a ticket to wealth and career satisfaction. Indeed, there are many recent college graduates who seem to subscribe to the following career planning thought process:
Step 1: I majored in history, political science, English, or some other field that offers interesting job opportunities that can be counted on one hand.
Step 2: Not being a fan of careers in call center operations or restaurant management, I really don’t like the jobs that are available to me. Hey, maybe I’ll go to grad school.
Step 3: Those guys on Boston Legal make a lot of money and work on interesting cases so maybe I’ll go to law school and get one of those jobs.
Step 4: I don’t really have money to pay for grad school. But that’s what student loans are for, right? With my high-paying job at the fancy Boston Legal law firm, I’ll re-pay those student loans in a hurry.
Now let’s review the hard truth:
We have way too many lawyers in the U.S.
Because we have way too many lawyers, we have way too many lousy lawyers who ruin things for the rest of us, financially and otherwise.
Law schools don’t care that there are way too many lawyers. They are too busy admiring the gobs of tuition money flowing in from students who just completed career planning Steps 1-4 summarized above.
These cash cow law schools are graduating 44,000 new lawyers every year with an average student loan balance of $77,000.
Job prospects for new lawyers are diminished in a down economy because business clients are known to start cost cutting with the legal budget.
While the top students from the elite law schools can find jobs at top firms earning $160,000 or more, the median salary for new lawyers is only $57,448. (Source: PayScale)
So why do so many young adults follow this path for the wrong reasons and incur so much debt for not so much money? The choices are: (a) they are misled by law school promotional literature; (b) they get all of their information about careers in law from television and movies; or (c) they just don’t know any better and don’t care to find out. Mr. ToughMoneyLove is afraid that a lot of them fall into categories (b) and (c). Unfortunately, the students who fall into those categories often end up being the lousy lawyers, i.e., clueless law students become dangerously clueless lawyers.
You can argue that the poor judgment demonstrated by defaulting sub-prime borrowers is similar to that shown by many law students in debt. In each case we must ask: What were you thinking?
What can we do about this law student debt party? The number one thing to do is get the word out. New college grads need to understand the realities in both job opportunities and student loan burdens. Can we count on law schools to do this? Probably not. Law schools are profit centers. Why would a university want to discourage tuition generating activity in one of its profit centers?
To be honest, maybe the best thing to hope for is that some cable network will produce a reality series about lawyers who struggle to make ends meet after writing the big check each month to the student loan lender. Each show could include a segment on involuntary pro bono work. (That’s when a lawyer works for free because the client refuses to pay.) There should also be segments where young lawyers try to figure out if they have enough money to buy an obnoxious Yellow Pages or TV ad so that they can stick out among the gazillion other lawyers chasing clients with money.
By this point, a lot of you may be thinking “who cares – let all these young lawyers crash and burn – better for us.” Fair enough. But wouldn’t it be better if some of the for-profit law schools crashed and burned instead? That will cut off part of the supply permanently while saving a lot of young adults from incurring needless student loan debt.
Before I finish, I need to make the point that I know lots of great lawyers. There is always room for more of those. What we need to discourage is the constant flow of college grads who look at law school and the law as primarily an economic strategy. That is bad for them, bad for their future clients, and bad for our economy. So please help spread the word.
If we are really lucky, maybe we can persuade some of the lawyer wannabes to become engineers instead. Our economy could certainly benefit from having more engineers.