Thursday, August 16, 2012

Biglaw and BigEd

Are law schools really as greedy as I suggested last week?  I received some pushback on that post, from both professors and practitioners.  One critic suggested that, if I wanted to see real greed, I should take a look at starting salaries in BigLaw.  "Just look at what those kids are getting today compared to what we got!" my critic exclaimed.  So I did.

In 1985, Cravath paid new lawyers $53,000; that was the salary other BigLaw firms tried to match.  During the same year, Harvard Law School charged tuition and fees of $10,060.  Yale and Stanford were a bit higher at $10,700 and $10,776.  The CCN charged $11,076 (Chicago), $11,200 (NYU), and $11,518 (Columbia).

What are the comparable numbers today?  Cravath is paying its first-year associates $160,000--three times what it paid in 1985.  Inflation hasn't been nearly that high.  If Cravath had increased first-year salaries simply to match inflation, those salaries would be $112,849.  So today's associates are getting 42% more, in constant dollars, than associates did in 1985.  Sounds like these greedy millennials are doing pretty well for themselves, doesn't it?

Not so much.  Law school tuition has gone up even faster than BigLaw starting salaries.  This year, Harvard is charging tuition and fees of $50,880--five times what it charged in 1985.  The multipliers for the rest of YS/CCN are similar; they range from 4.59 (Chicago) to 4.95 (Stanford).  A student who attends one of these schools and lands a BigLaw job today is actually worse off financially than a student who did the same in 1985--much worse off.

Here's another way to put it:  In the mid 1980s, three years of tuition at Harvard Law School cost about $30,180.  A student who landed a job at Cravath or another top-salary firm earned $53,000 in her first year--considerably more than the full amount she paid Harvard.  Three years of law school tuition was 57% of the BigLaw graduate's first-year, pre-tax salary. Today, the same student will pay about $152,640 to Harvard for three years of schooling.  That total is 95% of a BigLaw graduate's first-year, pre-tax salary.

But what about scholarships?  Perhaps fewer students pay full freight at Harvard today than they did in 1985.  Maybe, although only half of today's Harvard students receive any scholarship aid.  And the scholarship would have to be pretty substantial--more than $30,000 per year--to put today's graduate in the same position as the 1985 one.  The bottom line is that even the most financially successful law graduates today, coming from the most elite schools, reap a substantially smaller initial return on their law school investment than students did a generation ago.  BigLaw is paying more, but BigEd's tuition has gone up even faster.

Compared to other schools, HYS and CCN have been fairly conservative in their tuition increases.  In 1985, UC-Hastings charged California residents $1,212 for a year of law school.  This year, tuition and fees are $44,186.  A year at Hastings now costs thirty-six times more than it did in 1985.  Here are three other comparisons that I made for schools picked with a random number generator:

  • At the University of Missouri-Columbia, resident tuition and fees have risen from $2,490 in 1985 to $18,582 this year.  A year today costs 7.5 times more than it did in 1985.
  • At the University of Iowa, resident tuition and fees have risen from $1,680 in 1985 to $27,344 this year.  A year today costs 16.3 times more than it did in 1985.
  • At Villanova, tuition and fees were $7,000 in 1985; today they are $38,910.  That's 5.6 times more expensive than in 1985.

None of this touches the plight of today's graduates who work for government, mid-law, small-law, document review companies, and alternative employers.  Tuition has gone up for these students, just as it has for the graduates gaining BigLaw jobs.  But starting salaries in these other tracks have risen much more slowly than in BigLaw; some actually lag behind 1985 salaries in constant dollars.  That's a subject for another post.

Starting salaries, of course, do not reflect the lifetime financial rewards that lawyers receive from investing in a JD. Salaries for many of today's job entrants will go up over time.  But so did salaries for those who entered the legal job market in the 1980s.  Indeed, the period from 1980 through 2000 produced particularly rich rewards for many attorneys.  There's little reason to think that today's starting salaries--in any law-related field--will increase at higher rates than starting salaries did in the 1980s.

Investing in law school still pays off financially for some students, although that group is rapidly shrinking.  But even for the biggest winners, the investment won't pay off nearly as well as it did in the 1980s.  Some of the loss comes from changes in the legal market, but the lion's share derives from the much higher cost of legal education.  Whatever legal jobs they pursue--even if they are lucky enough to land those lucrative BigLaw jobs--our children will reap far lower financial returns from their law degrees than we did.

Update: [PC] Here's some more comparative data.  Most of the run-up in starting salaries at big firms took place between the late 1950s and the mid-1980s.  In real dollars the going rate is currently 14% lower than it was in 2006.




156 comments:

  1. "Whatever legal jobs they pursue--even if they are lucky enough to land those lucrative BigLaw jobs--our children will reap far lower financial returns from their law degrees than we did."

    Anon over at taxprof blog begs to differ.

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  2. OMG, I hadn't noted those anon posts before. I take comfort in the fact that he's attacking some character known as "DMJ" instead of me. If TaxProf links to this post, I suspect anon and I will have a delightful chance to dialogue.

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  3. Years ago, no one ever got fired from BigLaw. People had the time they needed to move on. There were jobs to go to. Things have sure changed for the new generation.

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  4. There was a huge spike (20% or more) in Big Law salaries a year or two after 1985. Why not use that as the benchmark? Maybe you didn't realize. Probably tuition has increased more even from that baseline, but it would be interesting to see.

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  5. You know this is typical boomer blindness. Every bit of it- selfishly comparing what a small percentage of students make to what they made and being upset because it seems like so much more. Forgetting about the plight of indebted students who don't get big law so they can forget their ridiculous salaries- for which none of them bill 2400 plus hours a year- are paid for by students who will be in debt for the rest of their life.
    I'll post more in this later.


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  6. ...and what if those LSs don't have biglaw recruiters coming to their OCI? does that mean they will charge zero tuition?

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  7. ...and since biglaw hasnt raised base salaries since 2008, then those LSs shouldn't raise tuition after 2008.

    the point is it's both a stupid ass justification and a red herring.

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  8. DJM- you made a big error in this calculation. I can understand it I guess because you are not a new Yorker .
    The cost of housing in new York has well outpaced inflation. You need to make a comparison of the cost of living in new York then versus now. The cost of living in new York is what drives associates salaries.

    Now go a step further and recall that professors in new York have greatly subsidized housing, medical and dental care, tuition benefits etc. You have to include these amounts for housing and private schools for kids in the calculation.

    If you are going to compare a Cravath salary from 1985 with the present- you have to look at much more than inflation. Making 160,000 is not the high life you might think at first glance.

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  9. And if you compare the Cravath associate salary with the law professor who has a guaranteed job and a guaranteed low cost fabulous apartment, you will see who is truly greedy here.

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  10. @8:11 PM,

    DJM shouldnt even bother. a waste of her time

    ReplyDelete
    Replies
    1. Then why did she make this post? She claims that associates are doing better than they would have if raises just kept pace with inflation.

      I'm saying this is wrong . Associates are doing much worse than she claims - in comparison to the mid 1989s- because the cost of living in new York has gone up like a thousand percent since then.

      It isn't just debt that staggers the comparison of 1985 to today. The cost of living also has a huge impact. If people claim students are greedy because they are making so my h more than 1985 grads, those people need to understand how expensive new York in 2012 is compared to 1985.

      Delete
  11. Thank you DJM. All I have to say...just some intergenerational thanks and respect.

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  12. 7:59, yes there was a jump after 1985--in that sense, my analysis is generous to law schools. I.e., in 1986 or 1987, Cravath raised its entry salary to $65,000. Law school tuition hadn't gone up to the same extent, so graduates in those years did particularly well: Their total law school tuition was an even smaller fraction of first-year pay than the 57% I calculated for 1985. If I had compared 1986 to 2012, increases on the law school side would have dwarfed BigLaw increases to an even greater extent.

    But there had also been spikes in BigLaw salaries before 1985; any one year would give slightly different results. I picked 1985 because it was a year for which I happened to have all of the necessary data--and I think it's representative of that era.

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  13. Are Biglaw associates working harder now than they did in the fifties? It wouldn't surprise me if they're working more hours, thus enjoying a smaller hourly wage increase than 42% would indicate.

    Plus, I know for a fact professors don't teach as much as they once did.

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  14. I'm just pointing out that your statement "looks like those greedy millenials are doing well for themselves" is totally wrong and misleading. Big law associates are not nearly at the level you suggest compared to boomer grads.
    You are not accurately reporting the comparison between Cravath 1985 and Cravath 2012 first year associates.

    It is important to get this right. Boomers constantly compare absolute salary numbers of associates and conviently forget the massive generational difference in cost of living in new York . In the context where millenials are being accused of greed it is even more important to get this right.

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    1. Um, that's what DJM is saying. "Greedy Millenuals" was both sarcastic and she was repeating what deuche colleagues were saying; she does not agree with the sentiment. She is arguing that, in fact, current law students and new attorneys are getting the short end of the stick both in compensation and debt load.

      Delete
    2. Starting a post with "um" is extremely rude and condescending. Her facts are wrong. Sorry if you don't care about that, but I do.

      Delete
  15. It is a complete fantasy that all law professors in NYC live in subsidized housing and have private school tuitions paid for. NYU and Columbia do not represent all law schools in NY.

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    1. The point I was making was in response to faculty who call grads " greedy". I'm sure those faculty don't include their perks as part of their salary when they are looking resentfully at what first years make.

      Delete
  16. FWIW, not too long ago first year salary included a 35K bonus as well. These days it's much smaller at around 10K.

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  17. I agree that life has gotten worse for new lawyers in many other ways as well: higher billable requirements in many firms, longer commuting times, higher health care costs. But remember that the people who have the greatest power to fix law schools are the people who run those schools--it's important to demonstrate that law school tuition has risen much more dramatically than even the highest starting salaries. If law schools can blame the plight of new lawyers on higher billables, cost of living, or anything else, they will--which allows the schools to shrug off their own responsibility.

    This post doesn't agree with the sentiment I quoted at the beginning; I think I pretty decisively show that the critic was wrong. My intent was to show that, whatever else has changed for good or bad, the rise in law school tuition *alone* makes life much worse for today's graduates--even when they get the highest paying jobs.

    Most of you who comment here know that; it seems almost silly to underscore. But I am amazed at how many professors and even practitioners don't get it. Self interest may stop them from ever getting it, but I have this uncontrollable urge to keep throwing facts at them!

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    1. Then why give them the incorrect statement that salaries at big law has outpaced inflation so it looks like those greedy kids are doing alright?
      It simply isn't true. grads at big law do not have close to a comparable lifestyle as the 1985 grad. But maybe if you haven't tried to rent an apartment in manhattan recently , you wouldn't understand that. It is important, though, because you are referencing firms in new York.

      Delete
  18. In 1985 a one bedroom in a then crappy NYC neighborhood like Chelsea or the UWS would have cost like $25,000. A similar amount would have got you a whole block of Williamsburg.

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    1. Thanks. People not living in the city don't understand the massive increase in renting much less purchasing a condo or coop.

      An elderly boomer friend the other day said "we never set out to make so much from real estate, it just happened.". They had some apartment in midtown that they sold for over a million and they bought it for about $35,000.

      Like it was ordained by god - millenials don't have this chance.

      Delete
  19. DJM makes it clear that the big law associate isn't actually making all that much, in light of all the debt he had to pay back. As far as inflation goes, her point is that graduates would actually be better with a lower salary as long as tuition matched inflation.

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    1. My point is that the big law associate isn't making all that much because purchasing power in new York is so much lower. And I'm angry that djm is prepared to concede that point to boomers who think we are greedy people.
      Manhattan is almost unaffordable.

      Delete
    2. Your point is that salaries seem higher than they actually are, which is the same thing that DJM is arguing. I'm not sure where you're getting this idea that DJM is conceding a point re: high salaries and millennial greed.

      Delete
    3. From her quote after comparing salaries based solely on inflation, by this incorrect measure she says "sounds like those greedy millenials are doing well for themselves.". Yes , she then goes to the cost of law school. But her numbers are very wrong- the 2012 big law grad is NOT ahead of the 1985 grad. Her mistake was using a general inflation calculator instead of looking at cost of living increases in new York. Cravath 1985 people were living in manhattan in much nicer places than todays grad can afford . By saying that based on inflation 2012grads are ahead of 1985 grads she misrepresents the true cost of living in new York in 2012.
      I don't want some 1985 grad to think that 2012 grads are able to live at a better level than they had, even apart from tuition debt.

      Delete
    4. Let me put it this way- djm should have said something like ". The huge increase in costs of living for the 2012 grad means they are not able to afford to live in the same apartments as the 1985 grad, their live style is dramatically curtailed compared to 1985, EVEn before we compare tuition levels between 1985 and 2012.". The millenials grade is well below the boomer in terms of absolute buying power. Further, millenials are billing at least 2400 a year in NYC .people have billed 3000. How many hours did Cravath require in 1983?

      So millenials are in a bind that just a comparison of absolute salaries ignores, but that is nothing next to the way millenials have to cope with student loan debt of at least (4) times that of the boomers.

      Add these two circumstances, vastly decreased purchasing power and vastly increased tuition, puts even the highest paids summer associate on a path that boomers never had to walk."

      Delete
  20. DJM,

    Re: Anon (and my apologies for any sidetracking of discussion of the subject of your post), maybe you and LP could offer an open invitation to debate this issue with law school apologists. I'm sure there are some media outlets that would be happy to moderate such a debate. But at least that way all of these trolls can be immediately shut up, instead of rambling on citing phony stats and talking about how you guys are wrong while conveniently never articulating how it is you're wrong.

    Just a thought. I've been thinking recently that a decently publicized debate would do a lot of good for the LS reform movement.

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  21. On another, unrelated note, a day or two ago a commenter mentioned an old New Yorker cartoon. Not sure if anyone found it, as the commenter suggested, but here it is: http://www.condenaststore.com/-sp/I-think-going-to-law-school-helped-my-painting-New-Yorker-Cartoon-Prints_i8542699_.htm

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  22. Half the students at Harvard are getting scholarship aid? Really? That's news to me.

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  23. @ 8:02 and 8:23, wow, you guys confabulutely miss the point much?

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    1. Maybe we have our own points that matter to us. I'm offended by people referring to millenials as greedy based on data that is simply wrong. I'm happy to agree to disagree.

      Delete
  24. @ 7:59, "There was a huge spike (20% or more) in Big Law salaries a year or two after 1985. Why not use that as the benchmark?"

    I suspect she used 1985 because there are some pretty comprehensive cost/debt/salary studies from both ABA and NAPLA from (I think) ca. 2009, both of which go back to 1985. I posted links a few days ago. If I can find them, I'll re-post here later.

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  25. But if you compare what a Cravath associate makes ($160,000) to what I make ($000,000), you will literally shit your pants! Try it!

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  26. DJM, keep them coming. Haters will hate but the truth is what it is...

    The funny part is big law people are just small precentage of the scheme, most people never get paid that much. Most people just eat shit and shut up because they are ashamed of the failiture that law school has brought upon them.

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    1. I'm wondering if this is like a crime victim who doesn't want to come forward because of shame. These students have been abused and ridiculed and blamed for their fate. They blame themselves and not the abusers.

      I understand that now. How can we help them come forward?

      Delete
  27. Anyone know of a good ethics guru?August 17, 2012 at 12:56 AM

    "Most people just eat shit and shut up because they are ashamed of the failiture that law school has brought upon them."

    I couldn't understate how accurate and important this statement is.

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  28. NY City has always had a sky high cost of living thanks to rent control. Thanks to real estate recessions it was possible to buy cheaply at some points if one had money. However real estate taxes and union wages in apartment buildings are very much higher than in the past.

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  29. I wholly agree with DJM but there are a few other factors to be considered.

    First, the impact of billable hours targets, an idea pushed by the Hildebrandt consulting firm and widely adopted in the early 1990s (1990-3) had a noticeable impact on the cost of living for associates. The effect of the targets was to force longer hours in the office which meant that junior lawyers were in turn forced to live near the office, in much more expensive neighborhoods.

    Second, the relationship of tuition to average incomes during the 80s and even early 90s was much more favorable. This meant that a law student working even the 20 hours allowed by the ABA (routinely broken in the 90s) could, if frugal, earn enough to pay their rent, food, transport etc. Moreover, since summer associate and clerk positions were well paid and reasonably available, you could bank a lot of your tuition in the 80s and 90s over a summer. Neither seem feasible today - the sort of law clerk jobs in big or medium law firms are no longer around, and summer associate positions are at most schools as rare as hen's teeth. Moreover, the clerking positions gave invaluable experience.

    The difference between private practice and public sector pay was also less extreme - and their were public sector openings. The difference between BigLaw, MidLaw and small law was not that big either - maybe 20-25%, in the early 90s $60-65k versus $50-$55k while law clerk's pay was about $25 per hour (which equated to $50k had they worked a 40 hour week, most I knew worked around 25 hours.)

    The result was that in the 70s to early 90s law students typically graduated with much less debt in real terms. A lot of the 80s graduates and at least some of the early 90s were able to pay off that debt in 2-5 years and often in 3 years. During that period some of the exodus from BigLaw was after the student loans were paid off - a junior associate could after aggressively paying down their student loans over say 2-4 years jump to a public sector job, open or join a newly created firm or go to a less well paid in-house role, or try for a professor position, without a significantly lower standard of living (since much of their high pay had been devoted to paying down their loans.) People will say this is still possible, and yes it may be, but for a very tiny proportion of law graduates compared to those who could do it then - and a lot of current law professors went that route then.

    Because going to law school was always comparatively a tough choice and being a junior associate was hard in terms of hours, there is this tendency for those who went to law school in the 70s and 80s to accuse the younger graduates of whining. It is true that 25 years ago law students and young law graduates faced mostly the same basic problems that exist today, but the scale of those problems, those issues, have become much much worse. Paying off student loans was crappy for a 24-7 year old in the 80s and 90s but it was feasible, working 20 hours a week and attending law school full time was exhausting and it hurt your grades, but the jobs were there and the grades were less important when the competition was less extreme, today perfect grades are almost-vital. It was tough in the 70s-90s but it has gotten so much tougher.

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    1. When my mom graduated in 1983 she paid $233.05 a month for 10 years to repay the $20,000 or so she had to borrow.

      For people who have borrowed and don't remember how much, sallie Mae will still have your record.

      She made $45,000 in her first job for a corporation and shared a huge 2 bedroom 2 bathroom apartment with a roommate for $400 a month. It was on 83rd just off broadway.

      Don't compare how "hard it was" in the 80s with now. That is so absurd

      Delete
    2. When talking about the billable hours and stress, no one in the 80s had the stress of 24/7 hours. Sure people could call you at home in the landline but there was no way to email you or text you every minute of the day.
      You had some turnaround time while people reviewed documents. Yes the process was very demanding and people billed 3,000 even in the 80s . But it is worse now when you can never get a break.

      Delete
  30. One other point - the USNWR law school rankings were published first in 1987, than after a 2 year hiatus started being published again in 1990 - and there was a lot of screaming from law schools and threats not to participate or boycott the rankings - which no one kept. It is hard to understate the effect of the USNWR rankings on law schools and on employment prospects for graduates of lower ranked schools in those rankings. A good regional law school ended up way down the rankings compared to the "national" law schools and this made their graduates less attractive even to local law firms - all of this first tier second tier crap seem to date from then.

    Oh and there was also the impact of Stephen Brill and the American Lawyer - what a schmuck that guy is.

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  31. New lawyers aren't doing too bad. It's just that the new generation wants a life of luxury that almost nobody has anymore except the so-called 1%.

    The 99% are getting hosed every day and the law students, who CHOSE to attend law school, CHOSE to take out the loans, HEARD about the job market, and CONTINUED to BORROW want to cry about it now!

    Think about all of the people struggling at a shit minimum wage job while you borrowed "cheap money" for a 3 year tour in law school. If you want some money to pay for your mistake, join the military and get some forgiveness that way--THEN an ONLY THEN will people open their ears to your cries.

    Law administrators and professors are part of the 1%. The whole country is rigged to protect their interests. Absolutely nothing is going to change.

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    1. What is your problem? Are you so full of gate that you have no understanding for the true suffering that debt causes for the thousands of graduates that were lied to about their job orospects?
      Law school is demanding. No one goes for fun. Most people who went to law school are willing to work very hard to improve their life

      Delete
    2. Lol I meant hate.

      The kid in the minimum wage job is screwed too. I'm not denying that.

      Delete
  32. Have fun working those BigLaw billable hours. Congrats to the few that make $160k and your life is miserable. That was the last thing I wanted to do coming out of law school 10 years ago.

    Ten years later, I "only" make about $105k a year and, coming out of a TT state school, have no debt. The best part...I'm at the office a total of 35 hours a week and only "work" about half of that.

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  33. Sorry DJM, but I don't think this post has much relevance.

    You can file this whole comparison of BigLaw and HYSCCN costs, the literal 1%, under Number of Angels That Can Fit on Head of a Pin.

    More than half of law school graduates cry for bread, and you're comparing the costs of bespoke suits.

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  34. 3:48 has a point, to a certain degree. Law school and student loans are a choice. Anyone starting 2009 or earlier gets sympathy from me, though. 2010 and later? Nope.

    What does someone have to make to be considered in the "1%"? Wikipedia cites anywhere from $500k to $1.3M. Law profs are paid well, but not that well.

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  35. literal may have been a shade too strong. the literal (top very small percentage) of law graduates.

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  36. 6:07:

    Dangit, here I had been labouring under the impression that I was a Won-Percenter.

    Now, because of you, and your blasted Wickedpedia, I've learnt how far off the mark I really am.

    Blast you, O Destroyer Of Illusions.

    ReplyDelete
  37. ^^^ Sorry, edit. "Won-Percenter" should have been supplied with intellectual property notice, thus, "Won-PercenterTM"

    (you will have to imagine the superscript as this particular venue does not support that html tag use)

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  38. No one has mentioned OCI which is happening. Right now certain schools seemed to have created more screeners than last year - but firms are doing fewer callbacks- even law review kids.

    I want to tell people that we tried to warn them, but they just didn't listen.

    Also a couple of firms are reporting no offers from the summer as well as deferrals from Atlanta. I think the myth that big law hiring is recovering will soon be proven to be false.

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  39. 8:23, 8:54, 8:43 etc (I am referring to the many posts by the same reading comprehension-impaired individual): I have never posted a comment in a blog before but your idiocy was so astounding I decided to write.

    I feel a lot of empathy for law students as someone who grew up poor, lived scholarship from scholarship and worked throughout school to pay expenses. It is tragic that some immensely talented graduates are not finding jobs because of the accident of when they were born/graduated. And then I read comments like yours 8:23, 8:54, 8:43 etc. You keep ragging on DJM's calculations and asserting she is claiming millenials are doing better and are greedy. You are wrong. You apparently cannot perform BASIC reading comprehension. Her WHOLE point was that millenials are doing WORSE -- even ones that win the Biglaw lottery

    Worse you are wrong and doggedly keep whining and posting self-righteously looking not just really stupid but also obnoxious/noxious. Learn to read. There are many talented graduates who should get a job in law. You are not one of them. You lack the basic skills of reading comprehension and personability.

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    1. Wow. Lol. Sorry if you don't understand that when she says big law millenials are earning way ahead of boomers based in inflation she is wrong . Sorry if you don't understand that this is crucially important for all millenials. Boomers want compare starting salaries without considering how much living costs have increased. They say things like "sure things were cheaper then but salaries were much lower."

      You simply don't understand how important it is to break this misperception.

      I understand she wants to focus on how much tuition and debt has increased since 1985. However, from her numbers it implies that big law grads can just pay $50,,000 of their salary on debt service and still be at the same level as the 1985 boomer grads. This is not the case.
      ( subtracting 112 ,000 - her inflation figure from 160,000 salary would give you a huge amount to pay down your debt -$48,000. ) I can see people looking at those numbers and thinking that 6 figure debt on a Cravath salary is easy to manage AND still live a great life in manhattan.

      Using incorrect figured to show that grads in new york are earning 42% more in real dollars than 1985 is not the way to convince people big law associates are not greedy..

      Delete
  40. "Recovering" is not the word. This is a correction from something that should never have happened. The hiring boom was inevitably going to stop, and big firms -- which we always seem to be talking about-- will go back to hiring graduates mainly from the schools they used to hire from, which we also always seem to be talking about. "Order" will be restored. But firms will hire smaller numbers of those associates, and the firm structures will be configured differently.

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  41. 9:54, etc.,

    You and I must be reading different posts.

    "Sounds like these greedy millennials are doing pretty well for themselves, doesn't it?

    Not so much."

    There's no point in continuing this conversation if you can't: 1) understand sarcasm and 2) understand that two sentences written next to each other generally deal with the same idea.

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    Replies
    1. I understand her sarcasm. But her whole post was instigated on refuting the claim that kids are as greedy as law school professors . Telling them that big law associates are living on 40% more in real dollars is not the way to do that.

      Delete
  42. 6:56, "Also a couple of firms are reporting no offers from the summer as well as deferrals from Atlanta."

    Emory, UGA, GSU or all 3?

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    Replies
    1. Not sure of schools because people want to be anonymous. I know Bryan Cave and Troutman are deferring.

      Delete
  43. This post is important. The system is justified by a few huge salaries. Truth is these salaries are necessary to pay debt and cost of living - leaving NYC associates no better off for attending law school. 0L's lottery mentality is domonsterably wrong bc even 160k in NYC can't bail you out.
    Elmyr

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  44. For my fellow lovers of irony, I offer you Thomas Cooley Law School, who defended a class-action lawsuit with the notion that its employment statistics were self-contradictory and meaningless, now publishing a report to say that the employment numbers are much better than its critics would suggest.

    http://www.cooley.edu/reports/recent_graduates.html

    For 0Ls reading this, the important context is that Cooley also publishes rankings of the nation's law schools which places them second behind Harvard.

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  45. To be fair with the comparison -- how do big law PARTNERS make out relative to 1985? I suspect their pay has gone up faster than law school tuition. I was in big law in the early 90s, and I remember profits per partner in the low six digits at my firm, now in multiple millions at the same firm.

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  46. Big law partners have been making out like bandits (at least the ones that haven't gotten dumped). So going to law school in order to become a partner at V100 firm provides an excellent return on investment.*


    *SARCASM

    ReplyDelete
  47. Don't forget the current interest rates on student loans today. Students loans today clock in between 6.7% on the low end (Stafford) and 8.5% on the high end (Grad PLUS). As I'm sure many graduates know, the interest rate makes a huge difference in terms of (i) interest that accrues during law school and (ii) monthly payment. It's known as a double-whammy! in the biz.

    ReplyDelete
  48. Stafford is 6.8%
    http://www.staffordloan.com/stafford-loan-info/interest-rates.php

    ReplyDelete
  49. @9:17, your uneccessary correction made me LOL.

    ReplyDelete
  50. Two suggestions.

    1. *Please* be consistent with your use of inflation-adjusted numbers. Saying things like "A year at Hastings now costs thirty-six times more than it did in 1985" is just absurd. Further, the inflation-adjusted rate of increase is high enough that it does not require exaggeration.

    2. "And the scholarship [from HYS] would have to be pretty substantial--more than $30,000 per year--to put today's graduate in the same position as the 1985 one.

    I received a need-based scholarship approaching $30K a year from one of those schools, when tuition was lower than it is now. I had no wealth and my family is what I would consider upper-middle-class, which is to say far less wealthy than the families of most people at HYS, as you have noted. You're understating the aid that is extended by what are not only fantastic, but extraordinary generous, institutions. (Of course not all schools have the same means.)

    ReplyDelete
  51. @10:48 AM

    I was wondering why s/he got .1% lower than I did.

    ReplyDelete
  52. To take a page out of the law school's practitioner's platitudes book, there does seem to be a significant amount of failing to "see the forest, for the sake of looking at the individual trees" going on here. DJM heard counter arguments, and successfully rebuts them, maybe not to the extent and specificity you wish. But the argument is successfully made and that is all that matters.

    I have been surrounded by those that are coddled and are coddlers, and their inability to see the truth of this matter are of the same origin for us. Here we sit, typing on comment boards, not mustering a serious attempt to produce change for those less fortunate than us. A generalization for sure, but I state it with confidence that I am mostly correct. Rationalization occurs on all levels.

    Law schools suck.

    ReplyDelete
  53. Does anyone have the link to the taxprof blog with Anon? I could use some good trolling.

    ReplyDelete
  54. I think the basic point DJM is making here is a good one (and not particularly arcane): Even if you assume that a student has the best possible outcome in terms of a post-graduation position, s/he will still be worse off than a similarly situated student ca.25 years ago.

    ReplyDelete
  55. 11:32,
    Thing is that's true for almost everyone these days. Wages are down and costs are up across the board (except profs and CEO's anyways).

    ReplyDelete
  56. Profits per partner figures at most BigLaw firms are fictional. They do not equate to what people actually earn.

    It was quite a bit cheaper to live in NY in the 1970s to 1990s on a BigLaw salary The real estate market was not mature, because there was no internet. One could pick up decent deals on apartments much more easily than now.

    The big factor was that there were not that many lawyers who had actually had a good start to their careers unemployed, even if several of the jobs turned out not to work out. I do not know of any lawyer who actually unemployed. It likely was hard even back then to make up for going to a lower ranked school, but a lot of lawyers did just that and landed very well, thank you.

    Today is a debacle, not only at the law student level, but also at the experienced lawyer level, and the culprit is the huge lawyer surplus as well as the high debt. They go hand in hand of course with the government handing out loans to increase the surplus of lawyers and the cost of legal education at the same time, the US News ranking schools on expenditures per student, while the ABA thinks there is nothing wrong and not much to fix here.

    ReplyDelete
  57. The stock market is nearing its multi-year high. The real estate market in NY City (but not the suburbs) is also recovered. However, legal hiring is very scarce. There is limited demand for legal services and very few job openings. Legal jobs disappear very quickly for even those who have them. In each practice area, more and more solos and small law firms appear each year, competing for very limited amounts of work. It really is the small business syndrome - that a high percentage of these businesses will fail. This blog is devoted to law schools and first year outcomes. The real tragedy is that what comes later for a high percentage of people who have the best outcomes early on is simply the inability to make a sustainable living with a law degree. A living that involves 40 or 50 hours a week of trying to build a legal business, and never produces even what a public servant (you name it- janitor, teacher, policeman) in that area earns at the same experience level is not a good living for those who had the best outcome right from law school. I think we are seeing more and more of those outcomes each year as the lawyer surplus builds up. There simply is not enough legal business for all of the small firms and solos out there. No amount of networking or business development is going to change that supply demand equation.

    ReplyDelete
  58. ^Please provide data to support the assertion above.

    ReplyDelete
  59. More Social Security Money Witheld Because of Unpaid Student Loans:

    http://abcnews.go.com/blogs/business/2012/08/more-social-security-money-withheld-because-of-unpaid-student-loans/


    What the hell is going on in this country?

    ReplyDelete
  60. Student Loan Debt is Keeping Young People Out of the Housing Market:

    http://www.businessinsider.com/student-loan-debt-is-keeping-young-people-out-of-the-housing-market-2012-8

    ReplyDelete
  61. Everyone knows that student lending is a scam.

    Why can't something be done about it?

    Why is it not being discussed this election cycle?

    ReplyDelete
  62. The Big Law part I understand, but who is this Big Ed that's mentioned?

    ReplyDelete
  63. Here is what I want to know: how many people who get these fancy Biglaw jobs keep them after 5 years? if it's very few, then why are Biglaw salaries the common starting point for any conversation about the value of a law degree?

    Might it have to do with the pervasive elitism that infects law faculty?

    ReplyDelete
  64. @1:16, Big Ed is the guy who shows up when you fall behind on your student loan payments.

    ReplyDelete
  65. While starting BigLaw salary growth has exceeded the general rate of inflation since 1985... I highly doubt it exceeded the rate of inflation of prominent positions in the finance sector.

    My investment banking friends can feel nothing but pity for the horrors of being an IB (read, big law) attorney. Compared to everyone else in the deal room, they are laughably underpaid at 160, despite being the best educated and having taken the most challenging career road in the room.

    ReplyDelete
  66. Thing is that's true for almost everyone these days. Wages are down and costs are up across the board (except profs and CEO's anyways).

    What the OP (further) shows is that the cost of a JD has outpaced the value of what you get in exchange even under the most optimistic assumptions. Most of us commenters probably knew that already, but it's useful to have it laid out for visitors.

    ReplyDelete
  67. @ 2:08 am

    Right. It wasn't fed money and bank fraud that drove real estate prices off the charts, it's the "union wages" being made by that damn fatcat building janitor.

    ReplyDelete
  68. 10:51 a.m., I agree that most students who go to Harvard can afford to do so--either because of family wealth or because of Harvard's scholarship support. But that's not the point of the post. The point is that, however the student funds her legal education, she will get a much lower financial pay-off than my generation did. This is a question of how we allocate opportunities and wealth between generations. There are still law graduates who will "make it" today. But the pay-off from their educational investment will be far less than it was for an earlier generation. Why is that? Is education really so much more expensive today than it was in 1985? Or are current educators--not just in law, but in many fields--taking for themselves more of the economic surplus that education generates?

    The link I provided in the main post is for the data that Harvard reports to the ABA. 49.9% of their most recent class received some type of scholarship, and the median grant amount was $19,705 per year. So only a minority of students (less than 20% based on the other reported figures--it's impossible to tell the precise number) get scholarships that would put them in the same position as students in 1985.

    I think my use of inflation-adjusted and unadjusted figures is, in fact, consistent. BigLaw has tripled salaries (before considering inflation); Harvard has raised tuition by a factor of five; and Hastings has raised tuition by a factor of thirty-six. As I make clear, all of those figures are pre-inflation. I then show that inflation doesn't account even for the tripling of BigLaw salaries--much less for the considerably higher raises in law school tuition.

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  69. Here is what I want to know: how many people who get these fancy Biglaw jobs keep them after 5 years?

    I can speak only for the market I'm in (not NYC or DC). Depending on the firm, I'd say 60-80% of BigLaw associates don't make it to partner in the firms where they start. Where do they go? Most seem to find a home in mid-law. Some go in-house or (if their spouses are well paid) join non-profits or government. I know one person who went solo.

    I have also noticed that, during the past few years, it's been taking longer for "washed-out" associates to find new positions.

    ReplyDelete
  70. 1:57,
    Cue the old loser who constantly posts about experienced attorneys having no jobs in 3, 2, 1...

    ReplyDelete
  71. If LawProf and DJM want to open the door to a lot of inconclusive commentary and vainglorious puffery by bored, and relatively successful and comfortable people, then they can post on topics such as this one.

    If Law Prof and DJM want to help the life destroyed scammed, SL debtors, who were scammed by the criminal law school cartel and are now 2nd class citizen outcasts (As Nando and the real scambloggers do) they will go back to the emergency room and stick to the patients that are dying.

    Frankly, I lay a lot of the blame for the whole mess at the door of HYS. They were smart enough to know what the hell was going on for the last 20 years and just did not care and still so not care, as is evidenced by the commentary here.

    And really the HYS hypocrites are probably glad not to look at the brutal financial devastation they have caused in human terms, and will gladly talk about anything else they can talk about in detatched terms so as to create distraction.

    Which is what the hypocrites do, for it is their nature.



    ReplyDelete
  72. I am confounded by the commenters attacking DJM. You people are idiots. DJM, pay them no mind; this is an excellent post.

    ReplyDelete
  73. @3:04PM

    Caviar tonight and a hot bath for you with scallops swimming in chardonnay?

    In your greedy and inhumane pea brain it is an excellent post I suppose.

    until the horror of the race dawns staggering the mind,

    the whole sea becomes an entanglement of watery bodies

    lost to the world bearing what they cannot hold. Broken,

    student loan debtors, beaten, desolate, reaching from the dead to be taken up

    they cry out, failing, failing! their cries rising

    in waves still as the skilled yachts of HYS pass over.

    William Carlos Williams

    ReplyDelete
  74. What "brutal financial devastation has HYS caused?"

    ReplyDelete
  75. Well, Prof. Diamond has had enough of all of you people complaining about the law schools:

    http://www.thefacultylounge.org/2012/08/brian-tamanaha-on-the-rising-cost-of-legal-education.html#comments

    ReplyDelete
  76. @ 3:51PM


    It is called negligence.

    HYS ought to have known better, and knew well what was coming and for a long time and did nothing to stop it.

    Allan Bloom said the top Universities are the Intellectual ganglia and management and pretty much lead all the other schools down the path they are going.

    HYS cannot play dumb and pretend they did not turn on the spigot or hose bib for student lending far to the left and never returned to shut the thing off while the garden hose flooded the whole damn neighborhood.

    If any HYS person out there has any self -respect they will try to advocate for Consumer protections against student lending.

    If any HYS person out here is a self loathing and hating HYS person they have my sympathies.


    ReplyDelete
  77. 2:31 Cue the Special Snowflake who does not believe that the glut goes beyond first years and believes once you are in BigLaw you are riding the waves to success. Biglaw departures are all voluntary or mutual. Anyone telling Special Snowflake otherwise is always the same poster and does not know what is really going on. SPECIAL SNOWFLAKE KNOWS BEST. To everyone who has ever posted on hits site, you better not post about the experienced law job market beyond the 9-month figure, because Special Snowflake knows the poster who posts about that is always the same old loser.

    ReplyDelete
  78. The other 200-odd law schools are not passive victims of HYS.

    ReplyDelete
  79. Fwiw there was a commotion on TLS a while ago when it was leaked that a first year at white and case was let go with three months severance. A significant number of people didn't believe it could possibly be true. This person had worked at the firm for less than a year, everyone loves him, things are great and he is happy . Then one day he is called into a meeting and very coldly stealth fired.

    I'm sure the same thing happens at other big law firms - the news just doesn't make it to TLS .

    ReplyDelete
  80. ^^ that was a reply to 4:35

    ReplyDelete
  81. Three months is better than the two months that is the policy of some BigLaw firms.

    ReplyDelete
  82. One of the points of this post. Law is a risky business today. It was a relatively safe business in the past. There is risk now of not being able to pay off one's debt comfortably or at all, risk of not getting an entry level job and risk of getting laid off and staying unemployed for a long time even if one gets a great entry level job.

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  83. @4:38PM

    Maybe so, but they were and still are nice places for cushy SL financed jobs for some HYS people.

    What do we call such people?

    Tin gods thrown out of hys heaven and living in a student lending bubble dream?

    Oh, and anyway, this is all useless.

    Lance Armstrong will be busted as well sooner or later.

    Maybe we are all living in an era of deception and that is just the way it is, and maybe that is the way it has always been.

    In any event, the old myth about Higher Ed being a path to success in America has been seriously questioned by two judges so far, so maybe judicially admitting the risk of higher ed/law school is slow progress enough.

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  84. @5:10--that is no answer.

    ReplyDelete
  85. My law school unfurled a glossy new marketing banner. It reads "if you lived in a rotten third tier toilet, you'd be home now!" This will lure in many new lemmings as they drive by!

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  86. I love how those in legal academia would try to use the rise in BigLaw salaries to justify the rise in tuition.

    As if the salaries of the 3 people who were lucky enough to work in BigLaw and/or who actually got a legal job justify a rise in tuition for the remaining 500,000 never-to-be-employed-in-the-legal-field grads. Really.

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  87. One other factor about NYC that has gotten worse since the 1970's- the real estate market and the cooping of buildings. Many of today's coops were nice rentals in the past. Young people could rent them and could afford them on a not huge salary. Since the 1970s the lions share of these nice apartments in good locations have become coops. You need a lot of money to pass a coop board and to be able to buy an apartment in one of these buildings, not just a downpayment. So the entry level apartments of 20 years ago are now reserved for people in their 30s who have the downpayments and the other assets to show the coop boards to get in. Rentals are uniformly expensive - like $2000 a month for a studio in a non-doorman building in Manhattan (read not so safe for women living without men). Condos where one usually does not need the same level of assets to buy tend to be very small and very expensive for tiny amounts of space in what are relatively nice new buildings. Condos are like living in a matchbox at a sky high price and beyond the reach of most people starting out. The rental stock in nice neighborhoods in Manhattan has almost disappeared. If you are not in one of the areas described above, you have a long commute to work. Lawyers work late- often till after dinner and pull all nighters on big matters. Very hard on the commute. Before 2000 or so, it was possible to live in a nicer, closer apartment. So the standard of living for new associates in New York City has dropped precipitously. Maybe it is different in other cities, but this real estate change is a downer in NYC.

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  88. The $2,000 a month does not cover expenses of living in the apartment. You need to pay gas, electric and cable just to have internet service, which you need if you have work emergencies when you are home. You are talking $2400 a month or so for your non-doorman third floor walkup apartment that only takes a half hour to get to work in midtown. That leaves only $5600 a month for food and to pay back law school loans if you are making $160,000. Food is going to run you $1200 a month or so, and you need to dress for work.

    You can pay back some loans if you live frugally, but you will not be living in comfort.

    ReplyDelete
  89. Have any of you people ever actually lived in New York?

    $1500 is plenty for a nice apartment in a nice part of town. Personally know many friends paying around much in Stuyvesant Town, Peter Cooper Village, Wall Street, and the Lower East Side.

    You firm covers your lunches (and probably most of your dinners).

    If you live really frugally, you should be able to pay back 50K a year easy.

    95K take home pay - 20K rent = 75 left.

    Don't need 25K a year for clothes and eating.

    BTW I'll be graduating HYS with no debt (thanks mom!)

    Proles.

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  90. Not sure if this has been said yet, but this comparison doesn't make a whole lot of sense. Recent graduates have very little control over BigLaw salaries, whereas faculty have much greater control over tuition charged at their school. Before you profs out there claim, "We don't set the tuition," then who does exactly? Who are the people who set tuition at CU law? The law school Dean? To say that faculty at law schools don't have any influence on their Dean is laughable. If it's not the Dean, then is it a central administrator? President of the University? Does the President say to the law school: "Here how much money you'll get this year - figure out your budget to fit the income I've decided for you"? How does the President make this decision? What information does he use? Is it a vote? Does the Dean make a recommendation? If anybody can give some insight into this, I would appreciate it.

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  91. We just looked for an apartment in Manhattan and have paid for one for several years. It is very expensive -bleeding money. Cost us $2400 a month all in for a flophouse. You can live for less if you share with someone. If you have to pay for health insurance it is more. One reason food is so expensive is that you do not have time to cook when you work in BigLaw. Some lunch is paid for, but not that much - like once or twice a month. You can order in and get the client to pay for dinner if you work till a certain time, but that time is getting later in most firms as clients complain. Furthermore, your name and the amount of the food bill goes right on the printout the client gets - sort of a deterrent to ordering at client expense unless you need to. Eating prepared meals is expensive in NYC. You have to pay for health insurance on top of that and buy a wardrobe, so you have startup expense. Also city and state tax rates if you live in NY City top out over 11%. You actually get paid half of what you make at the $160,000 level. It is more like $80,000 after taxes. Every time you buy a soda, and a bag of chips as a snack, it is $3.50. Lunch even in that cafeteria is like $8 or more. You pay $12 at least for dinner. If you sit there cooking the food, you will have a big supermarket bill and half the ingredients chucked in the trash, so you do not save money by cooking. All in all, working in BigLaw involves killing yourself and bleeding money. There is some left, but not as much as you think.

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  92. There are income requirements for Stuy Town - BigLaw salaries are not going to qualify. And I would be interested to know where in NYC can be found a "good" 1500 dollar apartment! I will put my name on that waiting list right away. I know, I know, you're a troll, so you don't really have answers to any of these questions.

    ReplyDelete
  93. @8:06-- You can't find a "good" apartment in Manhattan $1,500, unless you have a very strange notion of "good".

    ReplyDelete
  94. TO clarify: you can find a great apartment for $1500 if you split a 2, 3, or 4 bedroom.

    And all my friends in Stuy Town work in I-Banking so...

    ReplyDelete
    Replies
    1. Dude- 4 bedroom? I bankers in study town? Have you ever been to new York?

      It is true you can find a decent 2 bedroom in manhattan for over 3000. So two people would be maybe 1700 each.

      Delete
  95. 7:58,
    Bring a sandwich for lunch moron.

    ReplyDelete
  96. I think Stuytown is actually decontrolled and does not have income requirements for current rentals. A one bedroom is just over $3,000. Possibly could be shared. You could put up a wall and door in the bedroom and make it 2 rooms if management allows this. But that is another couple of thousand dollars. Otherwise one of you would be in the LR and one in the BR - not exactly luxury for someone working in BigLaw. I would not want to be in the LR if I had a BigLaw job and needed to get to work tomorrow. Stuytown does include utilities (likely heat and AC) but likely not internet and cable. You would probably be about $1700 a month if you could share the one BR.

    ReplyDelete
    Replies
    1. That poster claiming all the I bankers live in old school housing like stuytiwn is clueless. Don't bother. There are decent two bedrooms, as I said, for more than 3000. If you have a working spouse or a roommate you are fine.

      But don't begin to compare that to what people were walking into as 1st years in 1985. The comparison strains all credulity.

      Delete
  97. You can you fine a decent 2 bedroom apartment in Manhattan for over 3,000-- about $1000 or $1,500 over.

    ReplyDelete
  98. Stuytown will not be $1500 even if you share. Look at the availability below. Over $2000 for a 2 BR and probably $1700 for a 3BR. The link is below. Please notice that all of these apartments also only have 1 bathroom, which makes life hard for a share.

    http://www.stuytown.com/view-availability.aspx

    As far as bringing a sandwich, it will hold you up from getting to work in the morning. You miss having lunch with colleagues. You need to bring in a lot of food to have enough to eat for the whole day. Eventually, being the only person making constant trips to the fridge at the office will look stupid to others and hurt your career. Sandwich is okay for sometimes, but a job in itself if you are bringing all your own food. You do not save much by buying the meat or whatever at the supermarket, because the deli there is almost the same price as buying the sandwich ready made in your office.

    ReplyDelete
  99. This regards undergrad, but still, HOLY SHIT!

    http://taxprof.typepad.com/taxprof_blog/2012/08/emory-intentionally.html#comments

    Emory admits that it intentionally submitted false SAT scores to USNWR for 12 years!!

    But of course, "The investigation found nothing to indicate that anyone in the president's, provost's or dean's offices knew data was being misreported or directed or coerced staff to do so."

    Those damn low-level employees who have no bosses to answer to!!

    ReplyDelete
  100. 8:34,
    I do it...every day. No one goes to lunch with their colleagues, they're too busy working.

    Try living outside the city, there's beautiful apartments close to the city and you'll save a lot of money by not paying the city tax. Also groceries will be cheaper as well.

    ReplyDelete
  101. The real estate market is actually still depressed in the suburbs. There are good buys right now, and yes, you can make money in real estate by buying outside the city. Problem is that the least commute in NY is something like an hour and quarter to the office, and many are much longer. If you want to have time to do your work, get some exercise and lead a life you like (which is entirely possible at BigLaw), you probably should spend the money to live close.

    ReplyDelete
  102. 8:34 is lost and probably sucks at budgeting.

    The cost of food has to be one of the most grossly underestimated expenses for most families. I make all of my lunches on Sunday, throw them in the freezer at work and eat them for lunch everyday. I save thousands of dollars a year doing this instead of eating out.

    Enjoy eating out, 8:34. My loans will be repaid long before yours.

    ReplyDelete
  103. 8:47,
    Door to door my commute is 30 minutes and I live in a beautiful apartment outside of the city for much cheaper than the city. Again, no city tax so you save a lot of money that way.

    ReplyDelete
  104. Look, all of you folks whining about how graduate school wasn't worth it aren't saying anything new. Everyone has known since graduate school existed that it's for losers.

    See this video for example https://www.youtube.com/watch?v=1VIue4lSCP4

    ReplyDelete
  105. Sorry, I meant this video.

    https://www.youtube.com/watch?v=j4Apdtq5Zwk&feature=channel&list=UL

    ReplyDelete
  106. 8:55 we have a subsidized cafeteria

    ReplyDelete
  107. This comment section is like an autoadmit thread.

    ReplyDelete
  108. Good gawd - this is the battle of the pack lunches versus the eat lunch crowd.

    Whether you eat a packed lunch or eat out is about the firm culture - if the culture is you go out for lunch, you would be wise to get with the culture even if it costs you more. How you dress and what you spend on your suit is also driven by the firm culture - again get with the culture. Whether you can live in the outer depends on a bunch of factors - the hours you work, the location of your office, what evening demands you may face, marital status, etc. One way or another for your first decade or so as a lawyer you need to fit in - and it is waaaay waaaay worse than when you were a teenager.

    However, the one simple reality is that in cities where BigLaw paychecks are high the cost of living is also a lot higher and this eats up a lot of the gains.

    ReplyDelete
    Replies
    1. Lol. So you agree there is no way a 2012 grad earns 42% more in terms of real dollars than people in 1985. Big law salaries are driven up by the cost of living in new York which isn't reflected in a simple inflation calculator.

      Of course now firms are trying to keep expenses low, they don't reflect increases in living in new York since the rental market recovered. It may be a long time until we see increases again.

      Delete
  109. Once again - MacK has ALL of the answers.

    ReplyDelete
  110. DJM writes, "The link I provided in the main post is for the data that Harvard reports to the ABA. 49.9% of their most recent class received some type of scholarship, "

    Actually, it links to an lsac.org page for the U of Akron SOL. Oops.

    ReplyDelete
  111. "Once again - MacK has ALL of the answers."


    Yeah, and I hear he's also got a whole lotta skymiles, too. That means he has it all....

    ;-)

    ReplyDelete
  112. I am truly astounded by the whining on this comment thread by BigLaw associates earning a "mere" $160k and not being able to live in NYC. Look, I understand that the debt burden is high but let's get a grip. BigLaw salaries have increased by over 40% in real terms over the last 30 years while median household income -- you know, the income earned by the woman who empties your wastebasket [if she's lucky] -- has remained essentially flat.

    Yes the debt burden is high; yes NYC is expensive, but it's gotten more expensive for the cleaning lady too. Do you seriously think anyone is going to feel sorry for you because you have to share a 3- or 4-bedroom apartment in midtown, buy a half dozen suits and pay for lunch while also paying down your loans? Jeesh. And you guys call us boomers "entitled."

    If you can't afford Manhattan, move to Astoria, Weehawken, Union City, Jersey City, the Heights or Flatbush. All of them are within 45 minutes or less of either midtown or Wall Street and feature lots of livable apartments for under $2000 . Or just rent a closet studio in midtown. If you're not smart enough to figure out how to live on $160k and pay your loans, then I have to question how you were smart enough to get this far in life.

    ReplyDelete
  113. 7:12 pm, " Food is going to run you $1200 a month or so, and you need to dress for work. "


    Holy cow, what single person has a 1200/mo food budget?

    I feed a family of SIX on half that. And we eat quite well.

    Sheesh.

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  114. The real point is that even with BigLaw, you do not have a guarantee of being able to pay off your law school debt. Expenses are high and you have no guarantee of being able to stay long enough to make the repayments.

    The cleaning lady does not have a quarter million dollars of law school debt.

    Furthermore, it would be impossible to feed a family of six in NY on 1200/mo if you are working BigLaw hours and need to live relatively close to work. You are talking about making compromises that cost money in BigLaw so you have the time to do your job the best you can.

    ReplyDelete
  115. 8:18, thanks--I fixed the link. It had defaulted to the first school alphabetically in the database, but should work now.

    ReplyDelete
  116. Commuting from outside the City is time consuming.

    Most people have to walk several blocks once they get into the City. If you have to take a subway or bus once you get into the City, prepare for more delays.

    Most people have to use a method of transportation to get to the train or bus that gets them to the City. If you need a car, very big extra expense of living out of the City.

    Even getting up and down from your desk to the front of your office building can take 3 minutes or 10. You need to allow 6 minutes in the morning for this.

    In short, most people commute over an hour each way if they live outside NYC.

    ReplyDelete

  117. "What about those of us who already paid back our student loans? Do we get reimbursed for that?"

    No you don't. That is why debt forgiveness or even bankruptcy for all will never be possible. But I do think there should be a limitiation of interest and fees. A Student loan balance should never grow to more than 50% of the original balance.

    Those with doubled, tripled balances should be able to settle the debts and have them capped at no more than 50% greater than what they originally were, less payments already made, if any.

    I do not think anyone would object to that except for those in the best position to benefit from the obvious usury that has been taking place.

    How much of the 1 trillion dollars owed is due to unfair, usurious interest and fees, penalties etc?

    Going forward, Higher Ed needs to be revamped and the cost has to come down, and the lending system needs major reforms.

    ReplyDelete
  118. ^^And what people are responsible for that usury?

    What are their names?

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  119. 9:55,
    I live in Weehawken and my commute in the morning is 35 minutes from when I walk out of my apartment until I sit at my desk and about 25 minutes home at night. If money is tight for you consider moving out of NYC, there's a lot of great options out there.

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  120. When I click on the link, it still goes to Akron. This is from HLS's site.

    http://www.law.harvard.edu/current/sfs/policy/packaging.html

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  121. DJM, thanks for checking, but it still isn't fixed.

    It may seem as if it works if your computer already has the Harvard location stored in cache. But if the link is approached with "clean" computer, then it still pulls a default to Akron (unpopulated by data, at that).

    I think it's because the lsac website populates the data on the fly as a java window. Someone smarter than I will have to tell you how to link directly to Harvard's data, if it is possible.

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  122. Harvard's data is above at 10:19.

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  123. https://officialguide.lsac.org/Release/SchoolsABAData/SchoolPage/SchoolPage.aspx?sid=61

    This will get you close. You then need to click "ABA Law School Data" to populate the form for harvard.

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  124. 10:19, thanks for the link to Harvard--that page seems to give a good overview of their aid, as well as some of the numbers that are reported to the ABA. For those who want to see ABA data on Harvard or any other law school, here's what to do: Go to https://officialguide.lsac.org/release/OfficialGuide_Default.aspx. This is the entry site to the ABA-LSCA official guide to law schools. Click on any school that interests you, to go to that school's page. Then choose "ABA Law School Data," a relatively small link above the "Brief Introduction." The guide doesn't publish all of the data reported to the ABA, but it has some interesting ones--including the info I referenced on scholarships.

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  125. If harvard is so damn smart, why did harvard let the Sl bubble grow to 1 trillion dollars?

    My late grandfather used to talk about how he dug ditches along public highways and alongside college professors during the great depression.

    I want my schandenfreude and I can't wait to see the haughty professors of today doing menial labor and underemployed.

    Word of advice: If you ever find yourself underemployed, don't EVER talk about how you have more than a high school education, or you will be hazed mercilessly by your head to toe tattooed co workers.

    That is real school :)

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  126. Happy Birthday to Bill Clinton. Turning 66 tomorrow.

    It was Clinton's administration that took away bankruptcy protections for federally backed student loans in 1998.





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  127. "The Internet is a rich trove of surreal personal accounts of being penalized for overpaying student loan bills. But no one notices, because student borrowers are so utterly powerless. They can borrow a trillion dollars and still pose no threat to the immediate solvency of the financial system.

    SHARK-TANK SALLIE

    Naturally, this story has its brighter side, with enterprising corporate leadership generating shareholder value. The finances of Sallie Mae, the former government sponsored enterprise formally called SLM Corp, are a bit difficult to divine, but the operating profit margin is over 50 percent. It will surely surge higher if CEO Albert Lord executes on his current strategy of turning the $700 million "sweet spot" that is its "fee income" division into a billion-dollar business. "Fee income" means collections, but student loan collectors "do things that no other industry could get away with," a veteran debt collector named Joseph Leal told Student Loan Justice. They stalk, threaten family members, and jack up loan balances by thousands of dollars at whim, and they do it all with impunity, because they are legally entitled to garnish your wages.

    The margins on college-loan-sharking are so grotesquely fat that the government even rakes in a juicy cut: In 2010 the Department of Education reported collecting $1.22 for every dollar in defaulted student loans it had guaranteed - and that's after the sharks and their shareholders and the obligatory outright fraud had taken their first round of cuts. Between a quarter and a third of about $850 billion worth of federally guaranteed loans are already in default, so this is real money we are talking about. Given the $23 trillion worth of other securities the federal government has pledged to guarantee over the past few years, we can only expect the default rate to surge higher.

    Leveraged buyout titan J.C. Flowers made a $25 billion bid to purchase Sallie Mae in 2007, only to back out of the deal in the wake of a confluence of negative headlines: Rating agencies threatened to downgrade the company's debt to junk status if it went through; Sallie's dealings with the Department of Education and the financial aid authorities at various universities were the subject of an assortment of investigations; and the SEC was sniffing around an $18.3 million stock sale Lord had made in anticipation of the takeover announcement. (Lord sued Flowers for $900 million for walking away from the deal, but dropped the suit as a condition of obtaining the aforementioned 4.5 percent credit line.)

    Maybe the student-loan-shark hustle was too fishy even for Wall Street, even in 2007, to want to get too close to the action. And if Lord has been spreading the no-risk wealth around Wall Street in the aftermath of the credit crisis, it is not apparent from securitization volume, which has slowed to a trickle even as student borrowing keeps setting new records. In 2010 students borrowed $100 billion, but Student Loan Asset Backed Securities (SLABS) issuance was a meager $13.6 billion, down from a peak of $78.7 billion in 2006.

    Perhaps this lack of Wall Street skin in the game is partially responsible for the fact that such reliable business lobby organs as Forbes have demonstrated refreshing equanimity to the cause of restoring students' financial rights. The student loan shark bubble will, after all, ultimately prove far worse for business than the subprime mortgage bubble. But it also demonstrates that the shadowy ruling elite's overwhelming contempt towards its citizenry runs deeper and dates back farther than full time chroniclers of American decline ever believed.

    (Moe Tkacik is the Brooklyn-based journalist behind the new website Das Krapital. www.daskrap.com)

    Correction: This piece originally misstated that Nelnet, a rival of Sallie Mae, currently owns a fee collections subsidiary.

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  128. Profs. Merritt, Tamanaha and Jerry Organ consulted for this article at Law.com relating to new/continued substantial increases in law school tuition.

    http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202567898209

    (Note it was not terribly clear, at least on my browser, that this is a 3-page article. Look for pagination links near bottom).

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  129. Forbes Magazine:

    Are Universities Immoral?

    http://www.forbes.com/sites/moneybuilder/2012/08/14/are-universities-immoral/2/

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  130. Forbes Magazine Contributor Peter J. Reilly said:

    "I think that students overwhelmed with debt should be able to turn their credentials in or have them marked to market. We should fund it with an excise tax on university endowments.

    http://www.forbes.com/sites/peterjreilly/2011/10/07/occupy-wall-street-lets-have-a-student-loan-bailout-but-we-need-to-march-on-the-colleges/

    "Somewhat less crazy is Alan Collinge’s notion that we need to restore bankruptcy protections to student loans. He has given me a few guest posts on the issue."

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  131. There is a nexus between student lending and big Insurance.

    Somehow a defaulted student loan with sallie mae shows up on a credit report with the words:

    "Claim filed with Government, balance paid by Insurance Company."

    That alone is fertile ground for a lot of investigation since I feel that the huge Insurance Industry might be the culprit all along and willing to settle, since the Insurance Industry is probably one of the most heavily regulated industrys there is in the USA and when it comes to Student Loans, probably way out of Compliance.

    More later, and again, why is the US Treasury referred to as an "Insurance Company" in print on a Credit Report when paying Sallie Mae?

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  132. Anyone who thinks the 1980s was some sort of golden age for law school graduates should read "Take the Bar and Beat Me" by Raymond Woodcock (1991) ISBN 1-56414-000-8. Mr. Woodcrock chronicles his experience at Columbia Law School and as an New York City big law associate. He also worked as a had hunter for the big law firms. Even at the time it was published, the book served as a stern warning for those contemplating a law school career.

    Things have certainly gotten worse since the 1980s, but they were never good. Law firms, even the big law firms have never paid well. They demand long hours in a demeaning and unpleasant work environment, offer no job security, and provide few opportunities for job advancement. Even in the 1980s, only 1 out of 25 big law associates ever made partner, and associates had an average of an 18 month tenure at big law.

    I had a friend who interviewed with Craveth in the 1980s and was told that they did have cots in their offices, he would never make partner, and would only be there for a year. But it would look good on his resume.

    High Plains Lawyer

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  133. Correction, that was a 1 in 36 chance of a big law associate making partner.

    High Plains Lawyer

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  134. I absolutely feel ecstatic when I find articles relevant to my work and my subject.
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