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An Expensive Law Degree, and No Place to Use It

nytimes.com

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Re: An Expensive Law Degree, and No Place to Use It

#31

Post by hkmurakami »

wpietri wrote: post #20
hkmurakami wrote: post #4

It seems that the story is a that a once upwards spiral is now spiraling downwards, and people and institutions must adjust. At one point in time, law was lucrative, and there were not enough lawyers. Schools responded by growing in size and in tuition. Students could justify the loans because there was a high chance that the "investment" would pay off. Fast forward a few decades and law as an industry is contracting…

One thing I think is interesting here is the uncontrolled growth in costs. Paul Campos of Lawyers, Guns, and Money posted the average private-school law tuition [1]: All figures have been adjusted to constant 2016 dollars: 1956: $4,178 1974: $11,232 1985: $16,803 1995: $26,480 2005: $35,550 2015: $45,123 That just blows me away. [1] http://www.lawyersgunsmoneyblog.com/2016/06/end-game

At least with respect to 2005 and 2015, that increase looks to be in line with private undergrad tuition increases.

Of course, the top private undergrad institutions give much more in the way of financial aid than their legal graduate school counterparts.

Re: An Expensive Law Degree, and No Place to Use It

#32

Post by slgeorge »

imjustsaying wrote: post #24
godzillabrennus wrote: post #15

Earlier quoted context omitted.

Mostly automation. E-Discovery companies have dramatically reduced the cost for discovery. It used to require a room full of lawyers to discover evidence but now it is possible to have one person in a room full of computers to automate 10 such cases.

How much have legal costs to the client been reduced due to this increase in efficiency?

> How much have legal costs to the client been reduced due to this increase in efficiency?

It's pretty hard to answer that one as it depends on the type of legal services. Anecdata only...

My experience is from a UK based perspective. Over the last decade I reckon the likelihood of using an external firm for standard commercial work (sales contracts/standard employment) has dropped dramatically (80-90%). There are lots of reasonably trained lawyers coming out of the large firms, so you can hire an internal resource or use a boutique firm. They can do almost all that work.

International work remains the bread and butter of the large firms. Where you're dealing in jurisdictions that you're uncomfortable or your internal resources are not trained for. Super large deals where (frankly) the insurance from the law firm is worth it. Or specialist matters (complex IP) where the business risk is too significant.

Litigation is a different matter. No fundamental difference there in my experience. Perhaps on the administration side, but that's often a rounding error compared to the costs of the partners/counsel.

Someone said earlier that 'commercial management' has improved. As a non-legal specialist managing lawyers that is definitely a cultural change that the legal profession is embracing but still adapting to.

Re: An Expensive Law Degree, and No Place to Use It

#33

Post by sandworm101 »

mevile wrote: post #2

Kids are being advised by parents to get an expensive degree because when they were growing up that's how you made it. That's not how it is anymore. There's no free pass to success, no check all these boxes and then you've made it. You gotta use your brain early on, figure it out for yourself, because ultimately you're going to be the one having to live with the consequences of how you've spent your youth. I think th…

But there are plenty of glass ceilings that can only be breeched via formal education. If you want to be on a board of directors some day, you better either be a billionaire or have a masters or better, preferably more than one.

Re: An Expensive Law Degree, and No Place to Use It

#34

Post by cm2187 »

wpietri wrote: post #20
hkmurakami wrote: post #4

It seems that the story is a that a once upwards spiral is now spiraling downwards, and people and institutions must adjust. At one point in time, law was lucrative, and there were not enough lawyers. Schools responded by growing in size and in tuition. Students could justify the loans because there was a high chance that the "investment" would pay off. Fast forward a few decades and law as an industry is contracting…

One thing I think is interesting here is the uncontrolled growth in costs. Paul Campos of Lawyers, Guns, and Money posted the average private-school law tuition [1]: All figures have been adjusted to constant 2016 dollars: 1956: $4,178 1974: $11,232 1985: $16,803 1995: $26,480 2005: $35,550 2015: $45,123 That just blows me away. [1] http://www.lawyersgunsmoneyblog.com/2016/06/end-game

It's funny because you look at these figures, you look at real estate prices, you look at stock prices, and you think, wait we are in a double digit inflationary environment!

Actually what is inflationary is the activities of the middle/upper-middle class (college, housing, stocks, etc), which are of course underrepresented in the CPI indices. The combination of the never ending debt bubble and quantitative easing has created a very localised inflation.

Re: An Expensive Law Degree, and No Place to Use It

#35

Post by sandworm101 »

bruceb wrote: post #30

Its hard to feel sorry for people graduating now. The lack lawyer jobs has been known for 5+ years, well before these students enrolled. I wonder if there are any stats on the wages of law professors? Seems they would trend down? Do recent grads teach first year law classes?

>> Do recent grads teach first year law classes?

No. Not at any reputable school. Getting a job as a law prof usually requires a degree above the normal law degree. And you better have gone to a top-tier law school. It's a real commitment.

Re: An Expensive Law Degree, and No Place to Use It

#36

Post by caminante »

DannyBee wrote: post #29
caminante wrote: post #22

Earlier quoted context omitted.

It's tempting to counter by citing the "lucrative" special case: The top 5-10% of T14 law schools who receive entry-level associate salaries of $160K/year base + bonus. However, pricing power appears limited, creating a ceiling on wage increases. To this point, Vault100 firms have recently trickled out pay increases to $180K/year for incoming associates. Clients have laughed and said, "Good for your employees, but yo…

lucrative is also a relative term, since they are often working 2000 billable hours a year (which, depending on type of work/attorney, may be 60% to 90% of actual hours worked per year) In biglaw, i have friends who easily work 2500-3000 hours a year to make their billable hours requirement. So these salaries are not exact as great as one would think anyway

  lucrative is also a relative term
I'm familiar with the sum($)/sum(hours) =< minimum wage arguments. We're also talking about the top 1% of 1% of wage earners in their age bracket. You might be able to get there via other means with better quality-of-life, but by all means -- absolute or relative -- $160K/year base + bonus is lucrative.

Re: An Expensive Law Degree, and No Place to Use It

#37

Post by walrus01 »

caminante wrote: post #36
DannyBee wrote: post #29

Earlier quoted context omitted.

lucrative is also a relative term, since they are often working 2000 billable hours a year (which, depending on type of work/attorney, may be 60% to 90% of actual hours worked per year) In biglaw, i have friends who easily work 2500-3000 hours a year to make their billable hours requirement. So these salaries are not exact as great as one would think anyway

lucrative is also a relative term I'm familiar with the sum($)/sum(hours) =< minimum wage arguments. We're also talking about the top 1% of 1% of wage earners in their age bracket. You might be able to get there via other means with better quality-of-life, but by all means -- absolute or relative -- $160K/year base + bonus is lucrative.

2500-3000 hours billable typical result: burn-out, alcoholism, drug abuse, self destructive behaviors, infidelity.

Re: An Expensive Law Degree, and No Place to Use It

#38

Post by WalterBright »

MichaelBurge wrote: post #23

Why are lawsuits so expensive if there are so many broke lawyers aching for a job? It seems like a company could pay them a middling salary of $70k/year to handle ongoing lawsuits, rather than the $300-$700/hour that other lawyers demand. Obviously not for your big Oracle vs. Google lawsuits or where the entire company is riding on it, but for anything less than that. For example, every public company gets sued by op…

I don't understand this, either. If there is a glut of lawyers, why are their rates so high?

Re: An Expensive Law Degree, and No Place to Use It

#39

Post by freyir »

caminante wrote: post #36
DannyBee wrote: post #29

Earlier quoted context omitted.

lucrative is also a relative term, since they are often working 2000 billable hours a year (which, depending on type of work/attorney, may be 60% to 90% of actual hours worked per year) In biglaw, i have friends who easily work 2500-3000 hours a year to make their billable hours requirement. So these salaries are not exact as great as one would think anyway

lucrative is also a relative term I'm familiar with the sum($)/sum(hours) =< minimum wage arguments. We're also talking about the top 1% of 1% of wage earners in their age bracket. You might be able to get there via other means with better quality-of-life, but by all means -- absolute or relative -- $160K/year base + bonus is lucrative.

And $160k-$180k is first year salary, which is bumped up automatically until the seventh year, at which point the associate is making $280k-$315k salary. If they then make partner, they'll make much more.

Re: An Expensive Law Degree, and No Place to Use It

#40

Post by vostok »

caminante wrote: post #36
DannyBee wrote: post #29

Earlier quoted context omitted.

lucrative is also a relative term, since they are often working 2000 billable hours a year (which, depending on type of work/attorney, may be 60% to 90% of actual hours worked per year) In biglaw, i have friends who easily work 2500-3000 hours a year to make their billable hours requirement. So these salaries are not exact as great as one would think anyway

lucrative is also a relative term I'm familiar with the sum($)/sum(hours) =< minimum wage arguments. We're also talking about the top 1% of 1% of wage earners in their age bracket. You might be able to get there via other means with better quality-of-life, but by all means -- absolute or relative -- $160K/year base + bonus is lucrative.

There is no way that $195k ($180k + $15k) is the top 1bps of wage earners at 26. That's pretty comparable to, if not less than, what you could expect in tech at that age. This is ignoring finance, small business owners, etc.
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