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Do Your Financial Homework Before Going to Law School
Posted November 22, 2016.
You don’t have to read The Paper Chase to know that the academic demands of law school are immense. But, in light of today’s poor legal job market, the most important studying should be over whether to go to law school.
It has never been easier to get into law school, and it never has been more financially risky to go. Drill down hard on the outcomes produced by the law schools that admit you.
Unfortunately, some law schools have used deceptive practices in describing the bar passage rates and employment outcomes for their graduates. This led the American Bar Association to crack down on how law schools report employment information and even on law-school accreditation.
Consider these sobering statistics:
• In 2015, approximately four-fifths of all law school applicants were admitted to at least one law school. It is about 40 percent easier to get into law school than it was a decade ago.
• For the 2014-15 academic year, there were about 55,000 applications for law school. There were about 100,000 applications for the 2002-03 academic year.
• About 38,000 students entered law school in the fall of 2014. But only a little over 27,000 people who graduated from law school in 2014 obtained full-time legal jobs. Of those, a little over 6000 got the best-paying jobs – jobs at law firms with over 100 attorneys. These “big law” jobs mainly go to graduates of the most elite law schools.
• For the law school class graduating in 2015, approximately 75-80 percent of students borrowed money, and those that borrowed came out with an average debt of about $100,000.
• If you had to borrow your full cost of attending one of the law schools in Virginia, your monthly loan payment would range from $2000-$3000 per month. That’s a mortgage without the house.
To find information on individual law schools, and a lot more general information on outcomes, visit the website LawSchoolTransparency.com.
Many law schools have padded their employment statistics by hiring their own graduates for a while after graduation at a relatively low salary. The purported reason for doing this was to pay for students to do internships in places that might lead to jobs. The law schools at the University of Virginia and at William & Mary did this.
The ABA cracked down on this practice in 2015. It decided that such law school-funded jobs had to be separately reported from other jobs. The ABA also ruled these jobs would not count as full-time unless they last for at least a year and pay an annual salary of at least $40,000. Most law schools were not willing to pay that long or that much. And the influential U.S. News & World Report began scrutinizing this law-school hiring in its school rankings, which further disincentivized the practice.
Also, the ABA probably will soon stiffen accreditation requirements for law schools, which probably will force many bottom-tier law schools to close. To practice law in a state, you generally need to pass its bar exam. In February, the ABA will vote on implementing a requirement that 75 percent of a law school’s graduates must pass the bar exam within two years of graduation for that law school to remain accredited.
The ABA also has raised concerns about the quality of employment data reported by law schools. It recently released an audit of 10 randomly selected law schools. (There are little over 200 ABA-accredited schools.) Half of the audited schools did not meet the ABA benchmark of having its employment data properly documented 95 percent of the time. Two schools had proper documentation only about 55 percent of the time. One school apparently gathered its supporting documentation only after it was notified of the audit.
The ABA itself is under scrutiny. This summer, a panel of the U.S. Department of Education recommended that the ABA’s power to accredit new law schools be suspended for a year because of the ABA’s “lack of attention to student achievement.” The panel criticized how the ABA was monitoring law schools, such as its auditing processes and its analysis of law-school-graduate debt levels.
Going to law school is risky business. Law school tuition has risen so high that about the only way to pay off law-school student loans is to work full time as an attorney for over a decade. If you can’t get a decently paying, full-time attorney job, you might not be able to pay off your student loans, which are not dischargeable in bankruptcy. Before you incur that debt, educate yourself thoroughly on your prospects.
Written on November 22, 2016
by John B. Farmer
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