What is the value of a law degree?

By Bill Hebert

President, State Bar of California

A New York Times article published last month, “Is Law School a Losing Game?”, suggested that our nation’s law schools lure applicants into borrowing huge sums to pay tuition without disclosing the likelihood that their graduates will be unable to repay those loans or indeed to land a full-time job as a lawyer. The article spread the blame: on the law schools and universities for putting easy revenues ahead of students’ best interests; on the media, especially the law school rankings of U.S. News & World Report; and the applicants themselves. The blogosphere, at sites like Shilling Me Softly, says much the same.

The article again raised the question of whether a law degree has value today, a subject big enough to warrant two columns from me. This month’s column addresses key facts any law school applicant should consider before enrolling. Next month, I’ll address some of the things our profession is now doing, and can do in the future, to help law school applicants and law students secure a firm financial future.

What is the value of a law degree? The answers, of course, are, “It depends,” and, “Compared to what?” I rarely get calls from college students or graduates who are considering law school. I usually get calls from law school grads looking for jobs — after they have already invested three years and tens of thousands of dollars in tuition. By that time it’s too late.

Here are some of the things I think an applicant should consider before going to law school.

Professional expectations

If you have any doubts about whether you want to be a lawyer, don’t go to law school before you find out for yourself what lawyers do every day. Intern at a law firm or work for a law office. When I was a senior in college, I applied to law school and was accepted at two good schools. But I didn’t have a burning desire to attend either school without knowing exactly what lawyers did all day. So I worked for two years as a legal assistant and volunteered nights and weekends at the Legal Aid Society. One of the lawyers I worked for told me (in 1984) if I wanted to make money, I should go into business. He was probably right, especially in Silicon Valley in the ’80’s. But by working for some really good lawyers, I knew what they did and I knew I wanted to be a lawyer. It fit my expectations.

I haven’t regretted my decisions. Being a lawyer is intellectually stimulating. Lawyers earn respect in the community and are often asked to serve on the boards of their churches, temples, their kids’ schools, their alma maters and in government. We get the chance to help people in the most difficult times of their lives. But the practice of law must be a good fit for you. If it isn’t, you’ll be looking for something else to do in a few years. Why not skip the work and debt of law school and go straight into something you’d like a lot better?

Keep your professional expectations in line with what you will actually do when you get out of school. The practice of law is the practice of delayed gratification. For example, don’t expect to be a mediator immediately upon graduation. Lawyers who become mediators practice law for years so they have the background and experience to credibly explain the risks and benefits of litigation versus settling a dispute. The mediators most in demand are usually former judges. Going to law school isn’t necessarily going to get you a job as a mediator — or as a judge. Likewise appellate lawyers are specialists who must prove their skills in writing and oral argument before they can practice appellate law full time. And if you are now in law school, you won’t be arguing before the U.S. Supreme Court anytime soon.

Don’t go to law school thinking, “Well, even if I don’t practice, a law school education will prepare me for just about any job.” Wrong. A law school education prepares you to think like a lawyer: spot the issue, apply the rule, analyze the issue and reach a conclusion. But it doesn’t make you business-savvy, people-savvy or teach you how to be a risk-taker. It doesn’t teach you how to think like a marketing manager, a salesman, a teacher, an entrepreneur or a CEO. I would bet that most law school grads who don’t practice see their law studies as a waste of time. Granted, there are a few exceptions (John Grisham, Scott Turow, some CEOs) whose experience practicing law put them where they are today, but don’t count on being one of the lucky ones.

Law school expectations

U.S. News & World Report issues rankings of law schools. The most prestigious law firms recruit from only the top-ranked schools. I am not endorsing this; it is just a fact of life. If you are good enough to get admitted to one of the schools ranked in the Top 50, and you are in the top 15-25 percent of your class, you stand a chance of getting one of those $160,000-a-year jobs with a big law firm. If you don’t fall into these categories, the chances are that you won’t get one of these jobs. I was told early in my career that no one wants to hire the kid who was last in his class at Harvard. That axiom is true today. When you are applying to law school, and you don’t get into one of the Top 50, don’t count on landing a six-figure job when you graduate. If you are going to law school to get rich, think twice.

Salary expectations

This isn’t to say that you can’t graduate from law school, especially a regionally respected law school or at the bottom of your class, and end up making a very good living. Many of the best and most financially successful lawyers don’t work at big law firms. Don’t go to law school if you just want to make money.

Law schools may not be transparent about the success of their graduates or their starting salaries, but based upon surveys published by the National Association for Law Placement Inc. (NALP), we know that the vast majority of graduates employed as full-time lawyers right out of school (about 76 percent) make far less than $160,000. Very few are lucky enough to get a six-figure job. For those who have full-time jobs as lawyers, the average salary is about $83K, and the salary generally clusters around $40-$60K. There is nothing wrong with a starting salary of $50,000, and over time law school grads probably make more than their non-lawyer peers. So compared to non-lawyers, over time we probably do better, in pure economic terms, than our non-lawyer friends.

Before you go to law school, ask yourself whether you want to graduate and earn a five-figure salary that you could be making in business, teaching or some other vocation. Chances are, even if you are employed, that’s the most you will make. If you are one of the unlucky many who don’t get a law firm job, you will be making even less. And don’t fool yourself into believing that things will change once the economy gets better. Clients are pressuring lawyers and law firms to keep costs down, which means either fewer lawyers or outsourcing or automating routine tasks (like document review) that young lawyers used to cut their teeth on and law firms counted on to boost their bottom lines.

Debt

The law school graduates who have the most freedom to pursue a job they truly love are the ones who graduate without any debt. Before you go to law school, look at your future like a banker: what is the likely return on the tens of thousands of dollars of debt you are about to accrue and when will the asset called you-as-a-law-school-graduate become profitable? You will find that students with parents who can afford to pay their tuition and room and board will have an easier time after they graduate because they won’t be chained to their jobs in order to pay off their debt. The fact that the debt is non-dischargeable only seems to encourage lenders to keep extending credit, which likewise convinces law school applicants — and applicants to every other graduate school — to borrow against their futures. For the vast majority of law school applicants these days, it isn’t worth it.

Next month’s column will look at the information available to law school applicants, what transparency means for law students, law schools and law firms alike and the steps we as a profession can take to improve the system.