Some rules for risky times

Suppose you've thought about the general risks of attending law school but are still struggling over whether to accept a particular offer.  Here are some guidelines I would apply to that decision.  These rules require a little research and a bit of math, but they're not hard--and I think you'll find them worthwhile.  Even if you disagree with my metrics (and these rules reflect just my personal opinion), the guidelines may help you think through your own decision.

1.  Visit Law School Transparency and note two numbers for any school you are considering:  the "employment score" and the "school-funded rate."  The first number represents the percentage of 2011 graduates who held long-term, full-time jobs requiring bar admission nine months after graduation (minus those who claimed "solo" status).  Do not attend any school with an employment score of less than 50%.

• 50% is a very generous cut-off.  Schools will tell you that some graduates found good jobs after the nine-month mark; some are happily working in jobs that don't require bar admission; some are pursuing advanced degrees; and so on.  Some of that is true--that's why the guideline is 50% instead of 90%.  If you are paying for an expensive professional degree, shouldn't you have at least a 50% chance of getting a job within that profession by nine months after graduation? 
• Remember that even some of the jobs counted in the employment score will last only one year, offer little room for professional growth, and/or pay disappointing salaries.  That's another reason why the 50% rule is a generous one.
• What if a school with a low employment score offers you a substantial scholarship?  I'd still be very wary of attending that school.  Schools in this category are producing graduates with very tenuous outcomes.  Why not wait a year or two to see if the school's employment record improves, tuition falls, or if you're happy with employment in another field? 

2.  Now look at the other LST figure, the law school's "school-funded rate."  If that number is ten percent or higher, ask the school lots of questions.  It's great when a school decides to help graduates by funding career opportunities, but your tuition dollars are part of that funding.  Funding of this magnitude also suggests that the school's graduates are having special difficulty finding jobs; they may at least be struggling to land the type of jobs that the school's grads usually pursue.  Ask questions like:  How do students qualify for the school-funded program?  What work do they do?  How much are they paid?  For how long?  What are the job outcomes for students participating in the program?  Ask for hard figures on the last question, not just general assurances.


Once you have the answers, you'll have to make your own decision about this factor.  Remember that a big program (lots of students working lots of weeks full-time) isn't necessarily better than a small one.  The big program may include more graduates, but it also costs the school more money.  


Also be sure to ask the school how it sees its school-funded program evolving over the next three years.  Will your tuition help support a program that disappears before you graduate?  Asking about the future of school-funded programs is a good way to get the school's administrators talking about the future of law practice.  Are they overly rosy in their projections ("oh, we won't need that program after another year because the market is going to turn around")?  Or are they realistic about the ongoing challenges?

3.  For each school you are considering, collect three more numbers:  (a) the total number of JD graduates in 2011, according to the school's NALP report; (b) the number of 2011 graduates reporting salaries to NALP; and (c) the median reported salary for that class.  If these figures are not on the school's website, call and ask for them.

• For (b), be sure to get the absolute number--not a percentage.  When schools calculate the percentage of reported salaries, they often use employed graduates as the denominator.  In the next rule, you'll calculate the percentage of salaries reported for the full graduating class.  That's the more meaningful figure.
• For (c), be sure to get the median reported salary for all jobs, not just the median for private practice.  Many graduates no longer have the option of choosing between private practice and other work; the overall median is a better guide for applying the rules below. 
• If the school tells you that the salary figure is "not representative," because many graduates fail to report their salaries, tell the school that you're aware of that fact.  You can explain that you don't plan to rely directly on the median; instead, you will use it to make wise decisions about tuition and debt load.  
• If the school refuses to disclose all of this information, do not attend the school.  What in the world are they hiding?

4.  Divide the number of 2011 graduates who reported salaries by the total number of graduates in the class.  This tells you the percentage of graduates who reported their salaries:

• Example:  200 people graduated and 110 reported salaries.  110 divided by 200 = .55 or 55%
• Another example:  240 people graduated, and 30 reported salaries.  30 divided by 240 = .125 or 12.5%

If the percentage you calculate is less than 25%, don't attend that law school.  Low reporting rates reflect one or more of the following:  (a) graduates did not obtain full-time, long-term jobs (NALP only collects that type of salary); (b) graduates had very low salaries (people tend not to report those); or (c) the school knew the salaries would be low, so didn't work very hard to collect them.  If less than a quarter of the graduating class reported salaries, that's a danger signal.

5.  Don't take on more educational debt than your law school's median reported salary for the class of 2011.  

• Count all educational debt in this calculation--college, law school, and any other degrees.  If you've been admitted to a law school, you can ask the school's financial aid officer to help you make this calculation.
• This is a tried-and-true, old-fashioned rule:  Don't accumulate more educational debt than your projected starting salary.
• Some advisors will tell you that it's ok to accumulate debt up to 1.5 or 2 times starting salary.  Ignore that advice when planning to attend law school.  The median reported salaries from law schools overstate the true middle salary; your starting salary may well be significantly less than the reported median.  Schools advertising a median starting salary of $60,000, for example, have a students earning $40,000, $30,000, or even 0 during their first year after law school.  A reasonable rule of thumb, taking this spectrum into account, is:  Don't borrow beyond the reported median.

Update:  If your school has a fabulous loan repayment plan (see the next point), you could consider taking on more than the median salary in debt.  But isn't the fact that debt has outstripped median salary--even at top schools--a sign of how unrealistic law school tuition has become?

6.  Even if your school's median salary stretches into six figures, don't take on more than $100,000 of total educational debt (again, include all degrees), unless you attend a law school with a fabulous loan repayment plan.  Fabulous plans provide repayment assistance for private jobs as well as government or public service ones; they act as income insurance for graduates.  Unless you have that type of insurance, six-figure debt is too much to carry at the beginning of a career.  The debt will hobble your life choices more than law school will expand them.

7.  Don't count on IBR or other debt-relief programs; the government can change those programs any time.  Assume that you will have to meet the obligations outlined in your loan documents.  Read the documents carefully and be sure you understand the terms.  How much will you pay per month under the standard repayment plan?  If the number scares you, think about putting off law school.

8.  Make sure you know as much as possible about practicing law.  Have you talked to lawyers in a variety of practice areas?  Have you asked those lawyers hard question about what they dislike--as well as what they like?  What do those lawyers do every day--not just on the once-a-year occasions?  Have you shadowed a lawyer for a day or half a day?  If you haven't done these things, do them now.

Even if you know you want to go to law school--and have a superb offer in hand--interacting with practicing lawyers during the next month will help frame your legal studies and give you a leg up in the job market.  If you don't know any lawyers, ask your law school to put you in touch with some alumni.  I guarantee that you will get more out of talking to lawyers during the next month than you will get out of reading books on your law school's summer reading list.  And if the interactions give you second thoughts about a legal career . . . it's better to entertain those thoughts now, rather than later.

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I know that these guidelines may make it hard for some students to attend law school.  If you don't have high scores and grades, you may not have been admitted to a school that satisfies these rules.  If your family lacks financial resources, you may not be able to satisfy the loan guidelines.  But remember:  The legal profession is suffering a serious job crisis.  Right now, we have "legal" jobs for only about half the number of students who graduate from law school.  And many of those jobs don't pay enough to service large loans.  You don't improve your options by paying for a degree you can't use or by taking on more debt than you can handle.

On a slightly more optimistic note:  It is possible that law schools and the legal profession will respond to the current crisis by restructuring law school, reducing tuition costs, or taking other steps that will help future students.  I don't know if schools will innovate, but many will have to do something.  At least a few innovative approaches should emerge during the next three years.  If law school isn't a good fit for you right now, why not wait and see if better opportunities emerge?