Bloodbath

A former student came by earlier this week to share the good news that he had managed to get a job with a small local firm. I had given him phone and written recommendations for it, and he had no other current employment possibilities, so I was pleased and relieved.  He wanted advice about what to do about his loan situation, so we went over it a bit.

His after tax salary is going to be around $3,300 per month (this is typical and perhaps a little higher than average for small firms in the area).  Rent is going to run him about $1000 per month (average for a one-bedroom apartment).  He has around $125K in law school loans (no undergraduate debt fortunately), so he would have to pay about $1475 per month on a ten-year repayment and around $910 on a 25-year.

So in the first instance that would leave him with a little more than $800 per month to live on for everything other than law school debt service and rent, which to this decadent baby boomer's ear sounds almost impossible, although of course I realize lots of people in this fair land have to manage it somehow.  Plan B would kick that figure up to $1400 per month, which seems more "realistic" (especially in theory rather than practice), but which would turn his law school debt into the equivalent of a larger than average mortgage that he would be stuck with until he was 50.

He asked me about IBR, which he had just heard about recently, so I told him what I know about it.  And of course all this conversation was contingent on the assumption that he can hold onto his job for a good period of time or convert it into a similar or better position, which, given the volatility of very small firms in the current legal economy, is a problematic one.

All this, by the way, adds up to an unambiguously "good" outcome, in the context of what's going on with our current graduates.  (Real legal job, i.e., non-temp full-time employment requiring bar passage = better than median outcome).

Would it be considered a good outcome by the typical graduates of, or prospective students at, elite or sub-elite law schools?  No it would not.  Let's take a quick look at how many graduates of such schools are in fact having similar outcomes (or much worse ones).  I've taken the new ABA data and calculated a "clearly bad outcome from an ex ante perspective" percentage for the top 20 schools.  This includes graduates who nine months after graduation are unemployed or whose status is unknown, employed in a law school funded job, re-enrolled in school, working for a firm of ten or fewer attorneys, or are in "business and industry," in "academia," or in a state or local clerkship.  Everything else counts as a good outcome.  Also, I'm assuming for the purposes of analysis that everybody who is listed as having a job in "academia" is actually employed in a law-school funded job, to avoid the risk of double counting in that category since no doubt a lot of grads employed by their own schools are dumped into that category.

Now of course this method is both over and under-inclusive.  Some individuals in these categories have had good outcomes from the ex ante perspective of prospective students at high-ranked schools -- they're in state supreme court clerkships, or in six-figure consulting positions, etc. On the other hand a lot of people categorized as having had good outcomes clearly haven't.  I'm counting all firm jobs with firms of more than ten attorneys as good outcomes, along with all "government" jobs (which could mean practically anything) and so forth.  The point isn't to make individual judgments but general estimates, and if anything this estimate is conservative, especially once we're past the HSY tier, where "business and industry" probably does mean something positive in most cases (At Yale and Stanford that category includes 3-4% of graduates.  By the time you get to Chicago it's 9%. Head north to Minnesota and it's 17%).

Anyway, the numbers:

Yale:  21.4%

Stanford: 10.9%

Harvard:  20.9%

Columbia:  19.0%

Chicago:  26.6%

NYU:   26.6%

Penn:  20.0%

Berkeley: 22.2%

Duke:  25.5%

Michigan: 29.5%

Virginia: 31.1%

Northwestern: 25.8%

Cornell: 31.8%

Georgetown: 34.3%

Vanderbilt: 37.9%

Texas:  45.0%

UCLA:  50.0%

USC:  45.9%

George Washington:  47.3%

Minnesota: 64.4% 

So basically with the charmed exception of Stanford something like one out of four to five of grads at the very top schools are having what traditionally have been considered by graduates of such schools clearly bad outcomes -- a ratio that becomes more like one in three toward the lower half of the T-14, and then immediately falls off a cliff toward the bottom of the top 20.

And of course all this has a ripple effect down the food chain.  When people from top schools take jobs -- state appellate court clerkships for example -- that traditionally would have been considered bad outcomes for T-14 grads but good outcomes for top 50ish school grads, the top 50ish grads that would have taken those jobs in the past are instead taking traffic court positions where they're paid $35K to be slightly glorified secretaries for a year before becoming formally unemployed as lawyers. Etc.

Good times.