Monday, December 12, 2011

An Early Christmas Present for the Potential Law School Class of 2015

I’ve been looking at some of the discussion threads at Top-Law-Schools.com, which advertises itself as “created to provide you with the necessary information to successfully navigate you through the law school application process and find the ideal law school, so that your next three years can be as rewarding and enjoyable as possible.”  This seems like a useful public service, to which in this season of giving I’d like to add my own contribution.


First, most of you are still in the midst of the application process, and are understandably swept up by the excitement of it all. This is a problem.  To understand why, read this.  Since few of you will have the luxury my correspondent had of stepping back from the situation and taking an extra year to consider whether going to law school actually makes sense for you, you’re going to have to make a major intellectual and – especially -- emotional effort to pull yourself out of your current frame of mind in the short time left to you before you dump your first $30,000 into this venture (that figure is a rough estimate of what the average law student spends,  in both direct costs and opportunity costs, during the first semester – not year – of law school). 

To help you along that path, I ask you to take the following into consideration:

(1)    The employment situation isn’t as bad as you’ve been led to believe by the scary articles in the New York Times, the Wall Street Journal, etc.  It’s quite a bit worse.  As bad as things were for the class of 2009, they got worse for the class of 2010, and worse still for the class that graduated in May.  The preliminary numbers I’ve seen for last spring’s class are simply mind-boggling.  I really cannot emphasize this point enough: The employment “statistics” you read on law school web sites, and on the various school profiles available at Top Law Schools, are worthless.  They’re worthless because they tell you next to nothing about what sorts of jobs law graduates are getting.  All they tell you is that very few law graduates are literally unemployable. Ask yourself this: are you literally unemployable right now? Of course you’re not – if you had to get a job of some kind, you could.  (Indeed you may already have a job, maybe even a good one. I get emails all the time from people who are making $70,000 a year but are “bored” with their work and want to know if they should quit and go to law school.  Short answer: if these people could see the real data they would realize the question they’re asking is basically insane).


Here’s an example from the law school profile featured on Top Law Schools’ front page at this moment:  “The ultimate goal of nearly every law student is establishing their career upon graduation. Ninety-five percent of the University at Buffalo Law School graduates find positions or enter advanced degree programs within months of their graduation.”  (SUNY Buffalo’s web site features a similarstatement.  By the way I’m not singling out Buffalo here – despite being excoriated for doing so, the vast majority of law schools continue to advertise similarly meaningless “employment” rates).

The quoted sentence strongly encourages you to assume that 95% of SUNY Buffalo grads have real legal jobs nine months after graduation.  A real legal job is a full-time long-term position that requires a law degree.   It does not include part-time jobs, temporary jobs, or jobs that you don’t have to have a law degree to get.  Listen to me now and believe me later: a huge percentage of the law graduates schools list as “employed” nine months out do not have real legal jobs.   How huge is that percentage?  Nationally, only 68.4% of 2010 graduates of ABA-accredited law schools for whom employment status was known reported being in a job requiring a law degree nine months after graduation.   And that’s just the start of the bad news: 11% of employed graduates reported being in part time positions, and 27% reported being in temporary jobs. You do the math.

But maybe you’re going to law school because you’re bad at math.  OK, what this means is that less than half of the class of 2010 had a real legal job nine months after graduation (Real legal jobs, by the way,  now include quite a few jobs that pay $35,000 per year while requiring 60 hours of work per week).  And if you think things have gotten better since then, think again.  With every passing year, the market for law jobs becomes ever-more saturated with currently unemployed attorneys who, unlike new law graduates, already know how to practice law.  This situation is likely to be even worse in 2015, when an employer will ask, do I want to spend X to hire Y (that’s you), who needs to be trained to do this jobs, or do I want to hire Z, who can be paid the same salary as X, but who will cost nothing to train? Guess which one of you is going to get that job?

(2)    The salary “statistics” advertised by law schools are if anything even more meaningless than the employment numbers.  More than half of all law graduates don’t provide any salary information at all to their schools (at some schools the proportion is much higher).  When you see a claim that the median salary for graduates from this school employed by law firms is $107,000, keep in mind this means the median salary of graduates employed by law firms who reported their salaries – which in many cases means that “median” salary is something that less than ten per cent of the class is actually earning.  (Example: 54% of the class is working for law firms. One third of that group reported their salaries. This means the reported median is actually the median salary for only 18% of the class. That in turn means 9% of the class reports making $107K or above in private practice nine months after graduation).

(3)    Let’s say you end up being one of the 10% of every entering law school class (on the national level) who ends up getting a Big Law job.   Why wouldn’t you be one of those people? After all you’re Gifted and Talented.  At least that’s what your parents and teachers have been telling you for about 15 years now.  But here’s a conundrum: what if everyone around you is also Gifted and Talented? (Little known fact: the last non-gifted white child in America was born in 1962).  Well you’ll just work harder than your equally gifted and talented classmates, which will guarantee you better results as a matter of constitutional right. (I’m pretty sure that’s in the Constitution somewhere.  Maybe toward the back).  Except even if we assume this potentially problematic plan is going to pan out, getting a Big Law job these days “guarantees” you very little, beyond a high paying entry level position that you are almost certain to lose within a few years.  At which point you will be unemployed and competing for jobs with -- given the “training” Big Law associates (don’t) get -- other lawyers who are a lot more competent and a lot more used to practicing law for vastly lower salaries than those to which you’ve become accustomed.

(4)    When trying to calculate how much law school will cost you, keep in mind that most law schools continue to raise tuition much faster than inflation, so that median private law school tuition (currently about $39,000 per year) is likely to be around $50,000 per year in 2015, while average public school resident tuition (now around $18,500) is, due to governmental cutbacks, rising even faster, and should be around $32,000 per year four years down the road.


(5)    Very large numbers of lawyers hate their jobs, which they find simultaneously boring and stressful (This is, in the world of work, an unusual and particularly invidious combination.   Boring jobs tend not to be stressful, and stressful jobs are usually not too boring, but the legal profession has somehow managed to combine both features in a large proportion of its jobs).

What follows from all this?  I have three practical suggestions.

First, enrolling at a law school without first ascertaining the core employment rate of its graduates is an extremely reckless thing to do.  The core employment rate is the percentage of graduates who, nine months after graduation, have full-time (not part-time) long-term (not temporary) jobs that require a law degree (this excludes jobs that are categorized as “JD preferred,” or “other professional,” or “other non-professional.”)  Do not even consider enrolling in any school that refuses to supply you the core employment rate, in writing, of the most recent graduating class for which it has that data.    Right now, that’s the class of 2010, but by mid-February all law schools will have this data for their 2011 classes.  Again, at most law schools this number is going to be drastically lower than –indeed often less than half of – the school’s reported “employment” rate.  If a school hems and haws about providing this number, by for example claiming that it’s unfair not to count “prestigious” judicial clerkships in the core employment rate, tell them you would like their clerkship data listed separately.  (Keep in mind that anything other than a federal or state supreme court clerkship is not substantially different, for the purposes of future employment, than an ordinary temp job). 

Second, insist on being given comprehensive salary data for the most recent class.  Comprehensive data will include, most crucially, the total percentage of graduates who reported their salaries in each category of employment.   Again, consider that people with high salaries are far more likely to report them, so that any “median” salary figure that doesn’t include a large percentage of the class (which is the case at most law schools) is actually telling you that most graduates have low to non-existent salaries.

Third, go talk to some lawyers who are doing the kind of work you think you would like to do after you graduate.  (If you don’t know what kind of work you think you want to do you have no business applying to law school in the first place, especially under present conditions).    This may sound daunting, but most people like to talk about themselves, and many people will give candid advice to someone who seems to be taking the trouble to seek it out.  Try to get a sense of what these peoples’ jobs are actually like – of the extent to which they’re happy with their career choices.  Ask them what they know now that they wished they had known when they were in your shoes.

Most of all, keep in mind that for the foreseeable future going to law school will continue to be, for most people, a very risky thing to do.   Indeed, for the typical law student now enrolled at a typical ABA law school there’s little doubt that law school will end up being a losing proposition.  The most reasonable thing to assume about your own career prospects, if you choose to go to law school, is that they will turn out to be no different than those of other people who most recently faced the same choices you now face.   At the very least, find out what actually happened to those people.  Law schools certainly won’t tell you unless you insist they give you a good deal of crucial information that they continue to choose not to make public.  Remember, law schools need you -- or more precisely your tuition money -- more than you need them.  Don’t give them what they want unless and until they give you what you need in order to make a truly informed choice.

141 comments:

  1. "Second, insist on being given comprehensive salary data for the most recent class. Comprehensive data will include, most crucially, the total percentage of graduates who reported their salaries in each category of employment."

    Any person who asks for this kind of information will probably have their admissions application thrown into the garbage. Law schools are looking for people they can victimize, not critical thinkers.

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  2. Very well written. In an ideal world this would be the first page of the LSAC law school guide.

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  3. One facet that's often overlooked is salary trajectories. You might think the risk is worth it for a shot at earning $100k your first year, and then seeing the number slowly go up for the next 40 years.

    What people don't consider is the law firm attrition rate, and it's not just burnout, many people who want to stay are pushed out. You may be lucky enough to get a great starting salary, but the math doesn't look so good if you lose the job a couple years in and are forced to take a 50% pay cut at your next job.

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  4. I agree BL1Y. There are so many facets to the devious law school scam that need to be exposed that you feel like you're wrestling with a 20 armed monster. It's evolved into such a revoltingly dishonest and opportunistic institution.

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  5. Is what BL1Y says true even for "HYS" grads working at big law firms. If so, then aren't we actually dealing with a situation where law school is crap shoot for literally everybody. Nobody is safe from having law school, eventually, ruin their lives.

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  6. The term "core employment rate" is helpful, in that it is the start of a new lexicon for the truth about law school. We should create other terms.

    One thing I think you should discuss more, LawProf, is the rate of depression in law school. There are studies showing that law school may very well be the most effective way in inducing depression in a person. The rate of depression for 0Ls matches that of the general population - about 4%, but this grows to 40% by 3L and stays at 17% even two years after graduation.

    In my opinion, this is the most nefarious aspect of law school by far. One would be better off as s happy garbage man than a depressed billionaire.

    Here is one of many studies on the topic (notice how the ABA stopped doing these studies):
    http://www.law.fsu.edu/academic_programs/humanizing_lawschool/images/benjamin.pdf

    Here is a prominent biglaw partner talking about it.
    http://blogs.wsj.com/law/2011/11/18/anderson-kill-partner-talks-depression-among-law-students-and-lawyers/

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  7. 8:10, the trouble for top school grads may very well be temporary and due to the economy (or it might not be, who knows) but the problem at the lower tiers is definitely permanent.

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  8. One additional thing prospective students should consider is whether they have better than average aptitude in the kinds of skills that law schools and the practice of law require. If you are not already a good writer or logical thinker, law school is not going to transform you into either of those. I doubt that an undergraduate would consider investing in an engineering graduate degree unless she already had evidence that engineering was something she was good at, yet I think that many undergraduates apply to law school without considering not only whether they are likely to enjoy work as a lawyer but also whether they are likely to be good lawyers.

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  9. @8:10: The typical, ideal Big Law career is about 8-10 years as an associate followed by 30-40 years as a partner. With no attrition, we'd see an associate:partner ratio of about 1:4.

    At Skadden, the ratio is 4:1.
    Cravath is also 4:1.
    My former firm was 3:2.

    So, on the really harsh puppy mill end, you have an attrition rate of about 94%. Some of those people will lateral down to other firms, but of course, that means taking up someone else's spot, and so the shit keeps flowing downhill.

    At my former firm, which has a much better rate, there's still an attrition rate of 83%.

    HYS grads of course have a better chance at starting high enough on the food chain that when they lateral down, it's to a lower AmLaw 100 or an AmLaw 200 firm. But, not all of them. You'd have a hard time finding an AmLaw 200 firm with no HYS junior associates. Where do they go after getting the boot?

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  10. Sadly, many go teach at TTTs to profit off of the scam.

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  11. The worst part of this to me is those deans who pump up the employment figures by hiring their grads for 9 months at a minimal wage then fire them when the nine months is up. Deans have you no shame? Law Prof could you post a list of all the law deans who do this?

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  12. Should add that if you go to admissions events and talk to professors and deans/admissions workers and they tell you they don't know anything about bad publicity, lawsuits, fudged employment stats, or "well, why wouldn't the 95% statistic mean people employed in JD required jobs?" you should immediately assume the worst.

    If the professors still do not know about the practices of their own schools regarding job statistics or the rate of core employment among students they are at the least willfully ignorant and do not care about what happens to their students. It's been all over the news in the past few years- even in law reviews. It's their job to investigate this stuff. Why would you want to spend 3 years and 200K at a place where they bury their heads in the sand when faced with the truth?

    If administrators profess ignorance, they are straight-up lying to you. Every administrator knows about fudged stats. They all know about the games they play to induce students to come. Their jobs depend on filling those seats by any means necessary, just search "Illinois Law admissions dean scandal" and read the emails to see what admissions people think of you. You're not special little snowflakes. You're just "little bastards" (quoting the Illinois ex-dean of admissions) who have to be pandered to until you sign the admissions letter and the loan forms. Then, who cares what happens to you?

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  13. 9:03: There's no public information on this question (as far as I know) but I do know the practice of schools either hiring their own graduates directly for a few months during the crucial nine-month window, or creating various law school funded external positions ("fellowships" etc) that are putatively transitional positions, but are really designed to artificially pump up the nine month employment rate, is becoming much more common. According to NALP 2.7% of all "jobs" for 2010 grads fell into this category, and I wouldn't be surprised if that number is much higher for the class of 2011.

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  14. My information is limited, to be sure, but I don't know of a school that doesn't hire back its own grads for that nine month period.

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  15. 8:23 your premise is both right and wrong. People do major in things that may or may not be good at. Infact, many recent studies in cognitive psychology show that being good at something is only indicative of natural talent, but rather motivation is key to success. However the two concepts are different and not linked. As a result, if the curriculum in Law School actually taught the skills more overtly like most other post-graduate work, then we would not be having this conversation. A highly motivated student with average skills in almost any other program will trump a non-motivated naturally talented individual if provided adequate coaching. In most other programs, this type of coaching is built into the curriculum.

    For whatever reason law has chosen not to. But don't blame the victim, the student, when all other educational experiences had taught them to expect this type of coaching. How law defines rigor and challenging, while similar in most respects to other academic programs, contains some material differences that are not communicated upfront to the student because the student would never think to ask such a question. Therefore, until a student is experiences the law school learning environment, there is no way for them to make an informed decision as the curriculum is currently set up. Your comment reflects the wisdom of heinsight, not forsight which students deciding to go make their decisions on.

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  16. 9:03, while I agree with you that such practices are intentionally deceptive - they're still better than shitting your graduate out with nothing. At least those schools give (some of) their unemployed graduates a job for a few months.

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  17. @9:03 and LP: I think hiring your own grads is a perfectly acceptable practice. It gives students some much needed money, as well as experience and gives them a leg up on the unemployed competition.

    The only issue for this really is transparency. Disclose the number of people hired (directly or indirectly) by the school.

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  18. 9:21: I don't know about that (I'm not being rhetorical, I really don't know if this helps grads more than it hurts). These "jobs" often involve some sort of commitment on the part of the grad, especially if its a "fellowship" involving an outside employer. That takes the grad off the employment market for a few potentially crucial months. By the time they're actively looking for work again another massive cohort of soon to be desperate people are hitting the market.

    And of course in terms of prospective students it's just another deceptive practice in terms of employment rates.

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  19. 7:35, 7:38 and 8:27 thanks for your help exposing this part of the law school scam (salary trajectories and long term biglaw prospects). Nobody is ever safe. Somewhere in the neighborhood of about 5% who enter biglaw ever make partner in a biglaw firm, and even they are not ever safe as there is huge attrition among junior partners (at least 50% within 5 years of partnership) (and also attrition among senior partners).

    8:10 and 8:13 The above is true for HYS law graduates as well sorry to say. From my experience, a HYS pedigree helps you get in the door of biglaw but does very little to keep you there once you enter. Once in the door of biglaw, success is mostly determined by luck and economic trends nearly completely out of your control. There are many, many HYS graduates who are not working currently. The current economic situation means that fewer HYS graduates ever enter biglaw, but the long term job prospects at biglaw will not significantly improve even once the economic situation improves in a few years. In short, yes, at least biglaw is a crap shoot for everyone. The real question for at least 95% of biglaw entrants is certainly not will the gig end. The real question is simply how long will the gig last....followed by, of course, will there be another gig, and if so, what will it be.

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  20. Why don't recent law grads hang their own shingle? Spending vasts amount of time commenting on a blog is not nearly as productive as searching for clients.

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  21. 9:36, They do and they generally fail, or get by making $1,000 or so per month, because there isn't enough work out there, especially not for new grads without much credibility.

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  22. 9:13, 8:23 here. Thanks for your thoughtful comments. I agree that motivation is critically important to success and that talent alone is insufficient. But I also think that there are some basic skills that are key to success as a lawyer -- including the logic/writing skills I mentioned -- that we can't expect law schools to teach if they haven't already been acquired.

    I hope my comments didn't suggest I was "blaming the victim" -- I don't think they were. And there are no doubt some law schools or other entities that encourage students to apply by suggesting that everyone has the ability to become a good lawyer, when that's not the case. That's not to say that such folks won't be great at something else -- it's just that law is not the right career for them.

    But I do think that we need to change our culture such that law is seen as much as a considered career choice as other professions and not simply a path to upward mobility -- which, as we know, is not true for many. As such, I'd want prospective law students to think about whether the practice of law is a good match for their aptitude and skill set, just as much as they'd think about such things when applying to a graduate program in theater or music, science, or social work.

    I admit to not understanding your last comment: that "until a student . . . experiences the law school learning environment, there is no way for them to make an informed decision as the curriculum is currently set up" and that my comment "reflects the wisdom of [hindsight]." I had thought that was the point of these discussions -- and this blog post in particular: to offer advice to prospective students from those with the benefit of hindsight.

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  23. "But I also think that there are some basic skills that are key to success as a lawyer -- including the logic/writing skills I mentioned -- that we can't expect law schools to teach if they haven't already been acquired."

    I completely disagree with you, and think you must either be an academic or someone out of touch with the practice of law. That sort of doctrinal theoretical thinking is of little value in the real world of law, which is about time crunches, sales, deception and other skills. Logical thinking and writing skills are certainly required, but they will not separate you from the pack because everyone who could get into law school has those skills.

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  24. Mid career salary information:

    http://madamenoire.com/108489/law-schools-that-help-you-land-top-notch-salaries56988/7/

    I don't know how accurrate or what methodology is used, but Bl1y's comments come to mind. Many students who win the big law lottery will end up taking substantial pay cuts once they exit biglaw. So the legal profession is a bit unique in that a sizeable portion of attorneys will actually get paid less, several years into the job. Also note that many schools outside the top 20 or so on the list have mid-year salaries that are less than that of a first year biglaw associate, especially if you take into account bonuses.

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  25. @9:46: Here's the original data from Forbes, for those who are sticklers about stealing research http://onforb.es/oxUUje

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  26. "Logical thinking and writing skills are certainly required, but they will not separate you from the pack because everyone who could get into law school has those skills."

    Here's where we disagree, I think -- at least with respect to the kinds of skills that will make someone a *good* lawyer. That's not to say there aren't bad lawyers out there who manage to eke out a living -- I've encountered some myself. But I don't think that getting into -- or even graduating from -- law school is de facto evidence of these skills.

    Again, I'm emphatically not saying that prospective students who realize that this kind of work isn't their strong suit are untalented -- it's just that their talents probably should lead them toward a different career path. Someone who enjoys playing the piano but isn't really good at it (and doesn't have the aptitude to become good at it fairly quickly) probably shouldn't apply to graduate music programs; the same is true here.

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  27. 8:23 & 9:41. This is 9:13. I guess where I disagree with you comes down to a degree, and interpretation of good writing and logical thinking. A person can enter lawschool with acceptable developed skills for regular society. In fact, compared to many of their peers in other professions, they maybe described as above average. The fault in the current curriculum, is that it takes no account for learning style. As a result, a person who has acceptable skills in both areas may have acquired them from educational experiences that do not reflect the lawschool instruction method with respect to the skills. Lawschool teaches in a methodology that appeals to only learners who excel in certain learning styles. As a result, a person who learns best from different modes of instruction (ie non-lecture and interactive feedback), begins with a disadvantage. As a result, students who are good writers and learn well or acceptable under this format, progress. Students who may be good writers and logical thinkers in non-legal environments struggle, not because they do not have the intellect, but the method in which foundational skills are not clear. Most, not all, but most professors, even on one on one, refuse to assist students who need alternative methods of learning. Academic policies often cut students off from seeking alternative forms of instruction to master the base. As a result, many students develop bad habits or wholes in their learning. This may be perceived as not having logical thinking skill or not being a good writer, but that is not the case. Rather, its a instructional choice by legal academia, that correlates with a similar outcome of not being a good writer or logical thinker. It a question of degree.

    Overarching statements of being a good writer and logical thinker really are up for interpretation. The statement is too broad, and the assumption is that the existing teaching methodology and curriculum produces results reflective of those traits. Rather, the existing methodologies I believe stifle some students to different extents from capitalizing on their potential.

    You are correct saying that blogs are for hiensight reflection. And I may be a stickler, but for intellectual honestly, you have to point out how the data from someone applying point of view is different from someone who has gone through. A person can be a good writer and logical thinker, but the statement is to overbroad. It is a factor, but a factor that may or maynot be influenced by other factors.

    The issue is a mutli-dimensional problem which Law Professor is addressing. But certain statements when they are not fully explain distract from the conversation. I guess why I comment. The ironic thing is that I agree with your point for the most part. My only issue is that it is overly simplistic. Without recognition of other factors, and their interactions, it creates a pretentious tone that distracts from the conversation.

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  28. And, I should add, I'm also emphatically not saying that the many unemployed lawyers out there are unemployed because they're not good lawyers. All I'm saying -- per my original comment -- is that it would be good for prospective students to consider not only whether they'd enjoy legal work but also whether they have the aptitude and skill set that is likely to make them good lawyers.

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  29. This comment has been removed by a blog administrator.

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  30. 10:25, we overlapped in our responses (I was 10:26 as well). This will be the last from me, but I appreciate your thoughtful explanation. I didn't mean to suggest that my comment is the only factor -- just that it's an additional one to consider that was not mentioned in the original post. And I do agree that law schools should consider various approaches to teaching and learning. So I think that, as you suggest, we agree more than we disagree.

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  31. *sigh*

    http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202534948627&Law_school_establishing_branch_in_Savannah&slreturn=1

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  32. One problem with using core employment rates is that a lot of very elite schools send a big chunk of graduates to clerkships which are technically temporary jobs.

    I myself might have been considered "unemployed" using this approach, even though I earn a comfortable living and enjoy my work. I had to jump through a lot of hoops to get where I am today, but for the most part it was worth it.

    Also, just because your job does not require a law degree does mean you are a minimum wage worker. I know a lot of law graduates who are now successful consultants, hedge fund managers, etc.

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  33. @10:36: While it would be technically false to do so, I think it's okay for law schools to count judicial clerkships as permanent, rather than temporary.

    What people mostly care about is how good of an outcome you got, and a clerkship is pretty universally considered a good outcome, and conveys a huge advantage when looking for permanent work later. So, not technically permanent, but correctly put in the "good" pile.

    Schools should of course disclose this, or alternatively, just list clerkships separately.

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  34. 10:36: Only a few elite schools send a significant percentage of their grads to the kinds of clerkships that enhance long-term employment possibilities. In any case that's why I advise prospective applicants to ask schools to supply clerkship info separately from the core employment rate. (There are a lot of fake "clerkships" floating around these days).

    If somebody has a job that doesn't require a law degree 93%.7% of the time the law degree didn't help them get that job. Law schools love to claim without any evidence for the claim that whatever success people have post-law school is attributable to law school.

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  35. BLY1: The vast majority of judicial clerkships are for state district court judges. These are just temp jobs that mostly involve quasi-secretarial work.

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  36. "Also, just because your job does not require a law degree does mean you are a minimum wage worker. I know a lot of law graduates who are now successful consultants, hedge fund managers, etc."

    I agree with this, which is why the focus must be on the one statistic that addresses these issues, and is the one statistic that law schools manipulate more than any other - starting salary.

    Right now, law schools calculate average, median and 25%/75% percentile starting salaries using a sample that they know is biased and that they know does not represent the graduating class. Get the true salary figures, either by using a random sample of students or - preferably - by using all students and you'll see how bad it is.

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  37. "I know a lot of law graduates who are now successful consultants, hedge fund managers, etc."

    A lot? Really? List every hedge fund manager law graduate you know.

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  38. FYI on a $60/hour job opening

    http://losangeles.craigslist.org/wst/lgl/2747145805.html

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  39. Just a note about Top-Law-Schools.com. As an individual who posts in the forums on that site I have tried to direct aspiring law students to this blog so that they can get some perspective about the legal economy. In one of my first posts attempting to do so, I discovered that if you insert a link to Campos' website in a post on the TLS forums, the website automatically redirects you to some other blog extolling the virtues of legal careers (and basically providing a message antithetical to the one posted here).

    I found it most unfortunate that a website which is supposed to act as an open forum about legal education and the legal profession is, for whatever reason, re-directing links to this website in forum posts.

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  40. What? Link to this redirect phenomenon?

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  41. http://www.mysanantonio.com/news/education/article/St-Mary-s-to-offer-faster-law-school-program-2395225.php

    Here is one of the more creative attempts at trying to lock students into the law school scam by upcharging their 4th year of undgraduate studies and letting them graduate from law school after 2 years.

    I expect we will see much more of this in the future.

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  42. Here's a cartoon I saw that explains the whole theory vs. practice debate:

    http://abstrusegoose.com/418

    (LP: I keep getting a "URL contains illegal characters" error.)

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  43. I have a TLS account and can confirm what 11:04 is saying. If you try to post a comment, type insidethelawschoolscam as one word, and press preview it pops up as Law School Was The Best Decision Ever Made. Clever indeed.

    TLS has gotten a lot better in trying to warn people away from law school (just check out their What Are My Chances? or Choosing a Law School boards where much of the advice is pretty good) but the mods are very autocratic and reflexive when it comes to scamblogging. It's understandable given the behavior of some of the scam(spam)bloggers, and they're on our side, folks.

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  44. Wow why would TLS do such a thing? That's really odd.

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  45. LawProf why don't you talk more about the depression dynamic in law school? There are plenty of papers on it. You alluded to it when you talked about the graduate who went from a happy student to suicidal, but you've never directly addressed it even though there is plenty of literature on it. I think more than anything, the depression is the biggest reason to avoid law school.

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  46. P.S. If the 40% depression rate in 3Ls statistic is true, then statistically speaking there have to be people reading this comment who dealt with depression in law school. It's understandable not to want to talk about it, but at least here you can do so anonymously.

    ReplyDelete
  47. Try using Tiny URL, Bit.ly, or other redirection sites.

    ReplyDelete
  48. @12:37: Personally, I was depressed before I went to law school, and believed that the success/prestige/ability to help the community/enhanced sexual prospects/money/whatever people go to law school for would help. The point is, I'm pretty sure a contract with a retarded person is voidable. Perhaps I should play that angle.

    I mean, of course it didn't help. I miss being at least occasionally happy, I miss my ex-girlfriend, I miss seeing the smiles on people's faces when I refilled their drinks or brought them shrimp and candied walnuts and such, and I miss not thinking about cancelling my loans the fast way, all the time.

    "Oh, I was simply being hyperbolic, doctor. Ha ha. Can I go home now?" Actual conversation, unfortunately. I think just that bit cost me about $300.

    But it's Prof. Campos' blog, he can talk about whatever he wants to.

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  49. Mikoyan, I think everyone feels sad which may be what you call your pre-law school "depression" but depression is a clinical term indicating more severity. If you had a job that you sort of like, a girlfriend and enjoyed seeing people smile then you were probably as happy as most people. On your loans, can you do IBR?

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  50. This comment has been removed by a blog administrator.

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  51. I work in a law school admissions office. We are providing all of our NALP data, which includes all of the data that the author lists here, publicly on our website. We are also providing it in print form in the admission packets of all admitted students for this application cycle, as well as to anyone who requests a viewbook at our website.

    We are also providing a comprehensive breakdown of total law school borrowing for the last 2 graduating classes, so all admitted students get a histogram showing total law school borrowing in increments of $10,000 rather than just median and average debt. I am pushing to make this information public on our website as well.

    It is my hope that providing this information to our admitted students and to the general public will not only help people make more informed decisions about where to attend law school, but also stimulate people to demand this information from other law schools.

    Regrettably, tuition continues to increase exponentially (as do faculty salaries, curiously...staff are somehow excluded from these generous salary increases), and no real efforts are being made to control costs or raise non-tuition revenue. As a low-level staff member, I am doing everything that is within my realm of control to help prospective law students to make good (or at least informed) decisions about their future.

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  52. 1:51: That's good to hear. I very much hope you continue to bring your perspective to this site.

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  53. 1:51, What is the name of your school so we can survey the quality of this reporting?

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  54. Professor Aaron Taylor is at it again.

    http://www.nationaljurist.com/content/why-law-school-still-worth-it#comment-155221

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  55. That's an old story, by the Van Dyked charlatan.

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  56. "and no real efforts are being made to control costs or raise non-tuition revenue."

    Not to beat a dead horse but we all know why this is - non-dischargeable government guaranteed loans. Comprehensive reform that eliminates skyrocketing tuition while maintaining access to school for all students is desperately needed. This alone would cure so many of the issues discussed here.

    That being said, LawProf's post needs to be attached to any law school application for applicants to read.

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  57. I'm considering dropping law school or at least transferring to a cheaper one. As an econ undergrad, I am always highly suspicious of any numbers, especially after purveying the scamblogs.

    I guess what bothers me the most lately is how many of my colleagues tell me to reevaluate whether I should drop or not. They keep saying, "Since you're halfway done, might as well keep going, right?"

    I don't think a lot of people understand the concept of sunk cost. I want to thank all of you for continuing the fight. I remember being extremely depressed for a few weeks after reading this blog. It's just that......when you have people in authority, hell especially in academia, you want to be able to trust them. But I guess power and money corruption is rampant in every segment of society.

    If it wasn't for all of you, I would keep being part of the illusion that everything'll be okay. Even now, a part of my brain tells me that law school isn't a massive deception! I don't know what will happen with the transparency doctrine, loans being reengineered, etc., but you all have had an effect on one person at least by opening my eyes to true reality. Thank you.

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  58. This is 4:19 PM again. Just wanted to make a special note.

    For all of those who say that students ought to be more prepared regarding going to law school by diving further into the employment numbers, reading scamblog etc., I'll tell you why I went to law school.

    My undergrad econ. professor, who is nationally renowned b/c of her realistic economic studies, recommended this career path to me. If someone at that level can be deceived, then don't expect too much from a fresh out of undergrad. senior applying to law school.

    Some life skills, you only learn the hard way, no matter how much reading you do. I think many of my colleagues will realize how screwed they are only when their loans come due.

    Basically, if someone with a PhD can get tricked, don't expect from someone who just finished a bachelors. (Though there will be exceptions, as there always are).

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  59. 4:19/4:24 that is just astounding. But not surprising, if that makes sense.

    As to sunk costs, I don't think it's so much that highly educated people don't understand the concept intellectually as it is that emotionally they just refuse to allow themselves to consider that they're really in the situation they're in.

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  60. Law schools today must be a hotbed of cognitive dissonance.

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  61. "Some life skills, you only learn the hard way, no matter how much reading you do. I think many of my colleagues will realize how screwed they are only when their loans come due. "

    Yep. Even with full transparency (and realistically these scams will always fudge something) you will have naive 21 year olds hoping for that lottery ticket and others who are willing to spend 3 years studying when the govt is paying for it in the short run and when the economy stinks. Transparency is great and what these schools do with numbers is a travesty but loan reform is a screaming necessity.

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  62. LawSchool Prof,

    Great post, well-written and funny too! My favorite:

    Very large numbers of lawyers hate their jobs, which they find simultaneously boring and stressful (This is, in the world of work, an unusual and particularly invidious combination. Boring jobs tend not to be stressful, and stressful jobs are usually not too boring, but the legal profession has somehow managed to combine both features in a large proportion of its jobs).

    I have often wondered how they managed to do that...

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  63. "but loan reform is a screaming necessity."

    Have you done anything to advance this "screaming necessity" except for obsessively spamming this blog?

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  64. "My undergrad econ. professor, who is nationally renowned b/c of her realistic economic studies, recommended this career path to me. If someone at that level can be deceived, then don't expect too much from a fresh out of undergrad. senior applying to law school."

    Really? Wow she f*cked you hard.

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  65. Ohhh, you know what probably happened? Your economist professor was probably doing a bunch of expert witness work (meaning she was a very low regarded economist, i.e. a whore; real economists wouldn't be caught dead acting as some lawyer's sock puppet). Any way, that's probably what got her to overestimate the legal profession.

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  66. "If someone at that level can be deceived, then don't expect too much from a fresh out of undergrad."

    Ummm, actually she wasn't deceived. You were deceived. She lost nothing.

    ReplyDelete
  67. Awww...look at the cute little troll trolling. Forgot your meds today?

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  68. Unless the student loan mess starts to touch average Americans in a way that they can see in their own lives (i.e. they see having to forgive dead loans coming out of their own paychecks), who really has the motivation to change anything?

    JD graduates? They're never going to get refunds, so aside from the relatively few extremely angry/bitter ones that blog, it's easier to just try to put it out of your mind.

    Prospective JDs? Head-in-sand and/or ignorant and unable to comprehend he situation anyway (see above--some lessons need to be learned firsthand)

    Law Profs/Administrators: Keep the gravy train rolling!

    Law Firms and other types of employers: Keep pumping out all of those grads! Higher supply equals lower wages we have to pay!

    Law consumers: Same as above (i.e. Hey, that's great this indebted lawyer will set up my will/estate plan for $50 and a cup of coffee!)


    The ABA needs to protect the "profession" if anyone is going to. But I suppose that most of the grads still end up paying ABA dues/fees so maybe they want to keep it growing too.


    Where is the impetus going to come from?

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  69. "who really has the motivation to change anything?"

    1. LawProf who started this blog.

    2. The Law School Transparency folks who work tirelessly.

    3. Kurzon Strauss Aniszka who filed the lawsuits.

    4. Students who have written their deans about transparency.

    Don't project your own shiftlessness onto others.

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  70. Okay, "Who really has the motivation to change anything, and the ability to actually accomplish it?"

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  71. 1, 2, & 4 are toothless. 3 is the only hope out of your 4 selections.

    The problem is that even if 3 "succeeds," the most that's will happen is some minimal amount of increased transparency. The court isn't going to try to determine the actual value of law degrees vs. what students paid for them and award any damages to anyone.

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  72. Definitely not you. So why don't you just step your whiny ineffectual self aside and the doers of the world accomplish something.

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  73. "1, 2, & 4 are toothless."

    That's amazing that someone who has never done anything for the movement, nor probably has done anything in his life, has made himself the decider on whether or not the acts of others are "toothless."

    Any other powers of prognostication that you can share with us? What's tomorrow's lottery number? What should I invest in? I really want to hear the opinions of a total do-nothing loser.

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  74. 4:19 econ undergrad major who's halfway thru law school and thinking of dropping out -- two things.

    First, I had a friend seven or eight years ago - the economy was not great but not awful - who finished a year at Cardozo. He dropped out because he didn't want to be a lawyer and because he didn't rock his first year (middle of his class). At the time, I (who had not yet entered law school) thought he was crazy: not only had he paid 1/3 of his tuition, he had done at least 50% of the work of law school. He became a successful businessperson in eastern Europe and Asia and is very happy. (This is not a Zuckerberg story; he's not rich, but is doing fine and only had 1 year of debt to worry about. It helped that he was a nice, outgoing, worldly person with other talents - a knack for business and computers - but aren't worldliness and a versatile intellect traits lawyers pride themselves on? You seem to have some outside interests/knowledge too.) So, in other words, you're wise to think seriously about this if you have doubts. This is on the assumption you have poor employment prospects, which you may have a good sense of now.

    Second, that said, it's mid-December. Concentrate on your finals for the next week or two; you can revisit over break. Best of luck.

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  75. Ah, to be naive and hopeful!

    Time will tell which of us is correct.

    Funny that just because I disagree with you on this issue that I must be a "do-nothing loser." With you on the side of the "movement" I'm sure it will succeed posthaste!

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  76. LST is toothless?

    Cool story bro. I'd respond, but I'm too busy doing research for the Senate hearing.

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  77. "Time will tell which of us is correct."

    You will never be "correct" or any other adjective worth having. You're a do nothing loser who contributes nothing to anything.

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  78. 5:51AM, I'm as much anti law school as anyone, but even I'm not sure sure you should drop out after finishing 1 1/2 years of it. Especially with IBR. You're already going to have a ton of debt (even the $80 to $90k you've accumulated after 3 semesters is a lot) so you might as well finish it.

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  79. @6:27,
    Are you the guy who said of me:

    Why is it that every inept, nothing loser you meet in life wants to tell you this and that about the stock market? Do you not see who you are? Do you not see your place in the world? People wouldn't trust you to make their sandwich. Why do you think they would want investment advice from you?

    Are you going to meet me at the corner of wall and broad so we can talk, as I suggested?

    ReplyDelete
  80. Yes I'll meet you, what time? With regards to your pathetic insinuations of physical violence, let me warn you that I will break at least two of your bones. Not sure if it will be your nose and arm, your leg and ribs or what, but that's what's going to happen to you before I leave.

    Please confirm the exact location and time here, or at this private email address. a582103@nwldx.com

    And make it quick because I'm really angry today.

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  81. Somebody's been watching a bit too much UFC while they collect unemployment.

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  82. terry malloy you gonna let him show you up like that? don't let your namesake down. Your role model Marlon Brando would have met the guy in an hour.

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  83. I wouldn't do that if I were you. Prison is an awful place. All those cops and cameras wouldn't let you get away.

    As a note, I didn't threaten physical violence as you just did above, I just stated that you deserved physical violence. Subtle difference.

    Are you downtown? I can be there in 10 minutes. Under the statue of George Washington.

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  84. Oh now you're taking back the threat to kick my ass? That's what I thought bitch.

    I can't meet you in 10 minutes, but I'll meet you anywhere downtown in an hour. I'm looking forward to you making a move so I can kick your ass. Post the exact location and time here or at my private email address. a582103@nwldx.com

    Your move.

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  85. I just posted the location: under the statute of Gorge Washington, the corner of wall and broad street. 11:13

    I don't suggest assaulting me.

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  86. terry malloy, some motivation: http://www.youtube.com/watch?v=xvpxL8AgYxw&feature=related

    ReplyDelete
  87. I'll see you there at 11:13AM. You're in control of whether you get your ass beat. If you step to this, it'll happen. If not I'll let you go.

    ReplyDelete
  88. 5'10", tweed jacket

    I don't fight anymore. I have a career to protect.

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  89. "I don't fight anymore."

    Well I'm not coming all the way out there to not kick your ass. So unless you consent to an ass kicking meeting's off.

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  90. Lawprof,

    Please delete these absurd comments above. If ANYONE deserve violence, it is the "deans" and the "professors" who DID NOT TEACH ME HOW TO PRACTICE LAW.

    So here I am. Writing a motion for summary judgment in a huge MULTI MILLION DOLLAR CASE, without knowing the first bit of how to write one.

    Thanks garbage deans!

    My law school was complete trash.

    University of Arkansas School of law claims 85% employment, the real number is more like 33%.

    Lying criminals. I hope the school is bombed.

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  91. "meeting's off"

    This is how 100% of internet fight challenges end.

    http://bossthug.com/internet-tough-guy

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  92. "Please delete these absurd comments above."

    No keep them they're funny.

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  93. Seriously, angry guy. I just want to talk to you about how you talk to other people, and why maybe the anger you spew is having a negative impact on your well being.

    I'll meet you at that spot whenever you're up to it, send me an email. this.is.a.shell.email.account at gmail . I'll even buy you a cup of coffee.

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  94. "So here I am. Writing a motion for summary judgment in a huge MULTI MILLION DOLLAR CASE, without knowing the first bit of how to write one."

    What do you mean you don't know how to write an MSJ? In the least you could just take someone else's and modify it. These things are all public record documents that you can download with e.g. PACER.

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  95. "Seriously, angry guy. I just want to talk to you about how you talk to other people, and why maybe the anger you spew is having a negative impact on your well being."

    I'm not even in NY you dumbass. I'm three time zones away. I'm just messing with you for my own entertainment. That email I gave you is fron http://www.10minutemail.com

    Get a life already.

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  96. Still buddy, you need some help.


    If you're ever in new york drop me a line.

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  97. What an embarrassment.

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  98. Just please stop posting as terry malloy. That's a real insult to a legendary movie character.

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  99. And the above is just a PERFECT example of why the scam-blogs and scam-bloggers aren't really good for anything but venting and for entertainment!

    This one was enjoyable though. Thanks for that, you two!

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  100. Mediocrity at its best.

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  101. In the financial/housing crisis, now that we can look back at it with a bit more clarity, where would any effort have been most productive at minimizing/preventing the damage?

    Would it be on the real-estate brokers that were showing homes and puffing about them to get people to buy them, all the while letting them know what a great, interest-only mortgage they'd likely qualify for (with no income documentation or down payment necessary, of course!)?

    Or would it be on the lenders who were providing those loans?

    I'll let you draw your own parallels to see why devoting all of your energy to transparency is a bit misguided.

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  102. You might want to actually read a book such as "Slapped by the Invisible Hand" by a world famous finance professor, to see how the lack of transparency, followed by a sudden revelation of the poor quality of the loans, led to the crash. The housing crash was all about transparency - specifically the lack of it followed by a sudden revelation that crashed the market.

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  103. You missed the point I think...

    Transparency regarding the quality of the loans (i.e. on the lenders and what they were doing) is quite a bit different than transparency of the realtors and about what they were selling.

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  104. Reading many of the posts here I suspect there could be 100 job openings for every lawyer and some of you would still be unemployable. Seriously, some of you sound like psychopaths

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  105. Fine then, from now on when people talk about law school transparency, view it as "transparency regarding the quality of law school loans." Then please stfu.

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  106. "Seriously, some of you sound like psychopaths"

    Are you talking about the 11:13 fight under Abraham Lincoln's statue? That was all trolling.

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  107. There's also the fact that with housing, the loans were asset backed, so inflated home values were tied to the loans. However, there's no such problem with education, which makes it even more important to focus more energy on the lenders, not the goods/service salespeople.

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  108. 0742 - But that is NOT what this transparency fight is about...have you even looked into what LST is about and what Campos is arguing for when he talks about transparency?

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  109. Another example of how the housing crisis was all about transparency can be found in the Financial Crisis Inquiry Commission Report, which showed how the rating agencies were not given access to the underlying loan data and published bogus AAA ratings for profit.

    I can think of no less than 20 other sources verifying the connection between transparency and the housing crisis.

    Dear Lord. To say the housing crisis had nothing to do with lack of transparency might be one of the most idiotic things I have ever heard. It was all about lack of transparency.

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  110. "But that is NOT what this transparency fight is about...have you even looked into what LST is about and what Campos is arguing for when he talks about transparency?"

    Yes, they want honest data on employment outcomes so that students and lenders (i.e. the federal government) can know whether the decision to attend and the decision to lend is worthwhile.

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  111. "I can think of no less than 20 other sources verifying the connection between transparency and the housing crisis.

    Dear Lord. To say the housing crisis had nothing to do with lack of transparency might be one of the most idiotic things I have ever heard. It was all about lack of transparency."

    I don't discount what you are saying, but you still can't seem to grasp that there is a difference in kind with the transparency here...why is that, I wonder?

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  112. From what the commenter above at 7:46 is saying, it seems like he/she thinks that the LENDERS are being tricked by the lawschools into giving out these loans!

    So once there is transparency about the real job numbers, you think that the lenders are going to stop lending?! Please tell me you're not THAT gullible!

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  113. No I'm sure the federal government has no issue about handing billions of dollars a year to educational institutions that don't create any jobs.

    Once you have transparency on the jobs, the next step is to send the data to Senators and ask them why they're wasting precious educational funds.

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  114. Don't the senators have this basic information by looking at the BLS numbers regarding the legal sector? Also, don't they have access to the numbers regarding how many borrowers are either in default, deferring, on IBR, etc?

    I agree that MORE data is always helpful, but I think that there is already plenty of info out there that shows that the loans are a bad investment.

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  115. LawProf,

    Several dozen posts up a few people recommended a post on depression and law school. For what it's worth, I would like to see a post on this, too.

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  116. No.

    The BLS statistic is too "big picture" to be persuasive. It's not granular enough and so schools create arguments to diminish it, such as the ones nyc makes on this blog. COOLEY USES THE BLS STATISTIC TO MAKE ITS CASE FOR GOD'S SAKE!

    The default statistic is mismeasured and meaningless. IBR, deferments and other instances where you do not make your scheduled payments are not counted as default. Default is something like not making any payment in 12 months. It's a garbage statistic.

    The IBR data is new, but hopefully we'll be able to review it soon, by school. I think that will be very telling and it could be a game changer. If 90% of Cooley Graduates with student loans are on IBR, then that's damning.

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  117. Shark Sandwich,
    I agree, and I would like to see the rate of depression in law school (reportedly 40% by 3L as opposed to 4% at 0L) compared to e.g. PTSD from soldiers in war, prisoners and so on.

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  118. at 8:15 AM:

    IBR, Deferment, and forbearance are all forms of default because the borrower's regular monthly payments are not cutting into the principal. Just because they are not called defaults, does not mean they are not defaults.

    If you were to take away the cohort default rate and call the others what they are....defaults I would be willing to bet that defaults on loans given to college students would be a whole lot higher than 8.8% and the loans to law students would be off the charts.

    Of course those numbers are only speculation because as far as I know, the government does not track them.

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  119. I would hope the government is tracking IBR!

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  120. A default is when you have not met your legal obligation. IBR redefines what your legal obligations are, and as such, being on IBR is not being in default.

    If you want transparency, you need to report three separate things: percent repaying in full, percent in default, and percent in the middle areas of IBR, forbearance, etc.

    On the lending/government side, IBR is not the same as default, because some money is getting paid back. When you're looking at your risk assessment, that's incredibly important. (You'd also want to know how much was repaid before a default.)

    On the borrower/student side, IBR is also not the same as default. What you want to know is whether you'll be able to afford food, rent, health insurance, etc. Being allowed to pay a reduced amount on your loans is an important part of assessing the risks you run by going to law school.

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  121. BL1Y,

    Also, in finance law a default is the failure to pay your scheduled interest and principal. Your scheduled payments were the ten year term you agreed to when you signed the loan documents. Loans on which the borrower can't make the scheduled payments are downgraded to junk. Generally a borrower who can't make the scheduled payment is bankrupt. Bank regulators force banks to write off loans on which the borrower fails to adhere to their promise to make the payment. These are all hallmarks of default.

    But even if you want to change these traditional definitions to say that anyone who pays the interest on the loan has not defaulted, IBR is still a default. Assume someone has $170,000 in loans at 7% interest. The interest alone on that is $992 per month. Under IBR, anyone making $139,000 or less is not obligated to pay $992 per month (I can show you the math if you can't replicate it).

    In other words, under IBR, anyone not making $139,000 per year is not even obligated to pay the interest on $170,000 of loans!

    IBR is a default by any traditional finance standard that I can think of.

    ReplyDelete
  122. "IBR redefines what your legal obligations are, and as such, being on IBR is not being in default."

    So does a loan restructuring, but a loan restructuring is a undoubtedly a default.

    ReplyDelete
  123. Here's the math in case you're curious about the $139,000 number.

    $139,000 - 20,000 - $119,000. $119,000 x 10% = $11,900 which, divided by 12 = $992.

    20,000 = poverty limit
    10% = the IBR rate under Obama's new system

    ReplyDelete
  124. "IBR redefines what your legal obligations are, and as such, being on IBR is not being in default."

    Bankruptcy also redefines what your legal obligations are.

    ReplyDelete
  125. BL1Y:

    I was the person who posted at 8:25 AM. 8:48 AM is exactly right. Again, just because something is not called a default, does not make it so. If I loan someone money with the intention that they pay it back yet after the money is lent they can only pay me the interest, I am at a loss on the loan even if I do not agree to call it a default. Got it?

    These loans are being sold on Wall Street as SLABS (Student Loan Asset Backed Securities) and the true default rate is being kept secretive by calling defaults something else. These loans are being bought and sold as well as placed into the baby boomers' pensions, 401Ks, etc... So, when you hear the older generations say that "we should pay the loans because we signed for them", guess what????? When the true default rate is exposed (and it will be when many borrowers cannot pay) their retirement will be impacted. Does any of this sound familiar? It should.

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  126. As far as I know, SLABS are no longer being issued because all loans come from the federal government now. SLABS are something from the old system where private lenders would make the loans.

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  127. Maybe we're worrying over nothing because IBR has solved the "scam." In five years the government will have the data they need. How is Cooley going to argue their way out of it when the government shows them the IBR data?

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  128. IBR is a scam. The only people being scammed are those on it. Tax bill in my 50s or 60s?? No thanks. IBR just kicks the can down the road so that the problem is handled later. Would not want to see that debt GROW on my credit report. I am sure a bank would not either.

    The government can change those rules at anytime. The track record of the government on student loans has shown that they will do so. The only time a person should go on IBR is if they are staring default square in the face.

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  129. IBR and working for a non-profit are the only way to go if you have a high debt load. You get forgiveness on all your federal loans after 10 years of on-time IBR payments---and there is no tax penalty. I will be writing off over 200K.

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  130. At the end of the day, the "default" label isn't particularly useful to the government, and becomes less useful when it's expanded.

    What the government (or any other lender) cares about is a return on its investment. Someone paying 75% of what they owe is incredibly different from something paying nothing. And, at some point you can be on IBR and still generate a profit for your lender.

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  131. Fine BL1Y, off topic but whatever. The point is what the gov calls a default and what truly is a default are very different.

    You are correct about generating a profit for your lender on IBR: the government is able to lend this money at 0%, borrowers are paying around 6 + percent on average for federal loans, so yes, the lender may get most of it back, but not all.

    I would never lend any money to someone if I only received 75% of it back. The whole point o the discussion was to show how the true default rate is hidden in plain sight. That is all.

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  132. " I will be writing off over 200K."

    chaching.

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  133. The default/non-default model is simply an issue of false dichotomy.

    It is deceptive to say people on IBR haven't "defaulted" but not quite correct to say they are equivalent to people that are paying nothing. If I lend someone money and they pay me back half, that's still better than if they didn't pay me back at all but not as good as if they payed me back in full and on time.

    As BLY1, says:
    If you want transparency, you need to report three separate things: percent repaying in full, percent in default, and percent in the middle areas of IBR, forbearance, etc.

    That would give you the fullest picture. Default/nop-default is far too simplistic and presents a false dichotomy.

    ReplyDelete
  134. "It is deceptive to say people on IBR haven't "defaulted" but not quite correct to say they are equivalent to people that are paying nothing."

    That's fair.

    ReplyDelete
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