Saturday, July 27, 2013
Short Term Versus Long Term Perspective
I fear my criticisms of Simkovic and McIntyre's million dollar law degree study, and their responses, have produced more heat than light. No doubt I bear substantial responsibility for this because I have been in attack mode throughout. Perhaps I can bring this debate to a more useful level by indicating how my position can be reconciled with theirs.
As a practicing lawyer in the private sector, in civil litigation, I can tell you, Brian is correct. Where one goes to law school can dramatically affect your entire career. And the current costs of law school are outweighing what many private sector firms are paying year over year, especially since 2008.
The insurers my firm represent are getting tougher and tougher on cost cutting, cutting invoices where it has become ridiculous. And one insurer recently held a "reverse auction" that will lower the firms' hourly rate by 25% or more in fell swoop ($175 an hour to $130 an hour).
And the march to India and China and other places for "basic law work" and the ability to file online and not have to appear except by phone except for trial continues apace.
Brian, please don't back down. You have done a service in forcing the dialogue into this direction, and if there is some need for subtlety, then fine. But your basic analysis remains correct.
Thanks for your comments. I believe the doubts I raised about the study in my previous three posts have not been answered satisfactorily. But setting that aside, in this post I am trying to see if we can find some common ground.
Do not make the mistake of thinking that those who disagree with you want to find common ground. People like Brian Leiter and Steve Diamond mock and belittle everyone who disagrees with them. They are interested only in their own correctness--which only they get to judge--and in preserving the status quo.
I have disagreed with Brian about the prospects for lawyers and law schools (see my review of Susskind's The End of Lawyers here: http://scholars.law.unlv.edu/nlj/vol11/iss1/7/), but I believe he has done a service in illuminating the failings of law faculties. I find the current debate unsatisfying, though, because it has focused entirely on economic outcomes, which should not be the primary considerations in anyone's decision to attend law school. I know plenty of big-firm lawyers making great money who are miserable, and many solo practitioners working matter-to-matter who have fulfilling lives.
If S&M's point is that the lifetime economic prospects for lawyers--even those at weaker schools--are reasonably good, I take that as a positive because it means a person who genuinely wants to be a lawyer shouldn't be discouraged if the only avenue to that career is a lower-ranked school. On the other hand, I think Brian makes a very good cautionary point to that same person: think carefully about whether this is really the career you want, because there might be some serious short-term pain on the way to long-term economic stability.
Leaving admiration of earlier pyrotechnics to one side, a number of other recent comments have also added useful thoughts to the discussion. So Deborah Merritt's post of last week (http://goo.gl/RcKpkC) and Michael Froomkin's two-part posting yesterday and today (www.discourse.net).
This is everything other than an academic debate (pun intended). The tens of thousands of decisions taken to attend law school, or not, over the next years will profoundly shape the quality, demographics and ability of those working in the legal world of the future.
As others have noted, there is also the profoundly difficult question of whether the legal market is suffering from a temporary cyclical malaise, or on the cusp of structural change. My own view is that those who hold it to be the latter have much the better argument. In any event, to put all one's bets on expectations of a return to normal seems exceptionally unwise.
If the defense of pricey law schools is that they're an investment with likely good returns but only over the long term, yeah, about that: ask any investor what he thinks of an investment with high cost of entry up front, risk, decent ROI only in the long term, and no way to liquidate it and cut your losses.
Steven J. Harper's "A Dangerous, Million-Dollar, Law School Distraction" at The Am Law Daily (7/28/13) is worth a read. Perhaps the S/M et al piling on Brian (and others) may start to shift.
In several of my comments on Brian's recent posts, I made reference to the JD/Student Loan Institutional Complex. I hoped some might pick up on this description, perhaps to better define the Complex. Also in my comments I have made reference to the public interest. Unfortunately I'm not aware that the public interest in the Complex has been adequately addressed. I see the public interest as the proper training of attorneys to be to provide needed legal services to the masses, not just the 1% - .01% - that Big Law primarily serves. The problems of the Complex may not be serving well this public interest.
Also in my comments, I suggested following the money. Harper closes his article:
"But the authors [S/M] are undoubtedly correct about one thing: 'The data suggests [sic] that law school loans are profitable for the federal government' (p. 46). Law schools like them too.
"It doesn't take a multiple regression analysis to see the problems confronting the legal profession--but it can be useful to obscure them."
Apparently from the viewpoint of law schools caveat emptor applies to JD students. Is that good advice/training for a would-be-attorney who as an attorney may often serve as a gatekeeper?
Brian (and others) deserves the thanks of the legal profession in his efforts over the past several years. The responses on behalf of the Complex seem to be "Shoot the messenger." But they're shooting blanks.
I think Simkovic's response to criticism (along with Leiter's and Diamond's) has been rather disappointing. It's true that many people have made mistakes in analyzing the article, and that should be addressed.
What I find disappointing is that there are very strong criticisms that they appear to be ignoring.
For instance, they put the 25th percentile's earnings premium at $262,000 after federal taxes (they ignore state and local taxes on the assumption that you get the money back in the form of higher services, an assumption that would only make sense if everyone else in your community also got the earnings premium, but whatever...). It's extremely easy for tuition, interest, interest on debt taken to cover living expenses, and other costs associated with attending law school to meet or exceed that $262k premium. This is a fact they are yet to acknowledge, and their paper makes the opposite claim, that even at costs above what anyone anywhere pays ($60k/yr), there is still a positive return.
They have also failed to address that compensation comes in the form of both salaries and benefits. At the 25th percentile, the non-JD needs to earn only $7500/yr in benefits to wipe out the JD's earnings premium. Large firms and government jobs are likely to have far better benefits than whatever the non-JD is earning, but there is a huge number of law jobs that come with no benefits at all, specifically solo practitioners and partners in very small firms. This is not a trivial sector of the legal industry. I don't have the numbers nation-wide, but in Alabama 60.8% of attorneys are sole shareholders, and then there's some additional number of partners in small mom'n'pop offices. Those jobs don't come with health care, retirement plans, or paid vacation. They do however come with additional expenses, such as malpractice insurance, bar fees, and CLEs.
I'll add another criticism they have not addressed: The comparison should not be the average outcome for someone with your degree/grades/etc.
The better comparison would be to compare your likely outcome with a JD to your BEST alternative if you forego it. (And I mean your best realistic option, you don't get to be the American JK Rowling.)
I would assume that most would-be JDs could instead get a masters degree in education. A public school teacher with a masters in Pennsylvania has a salary that starts at the 10th percentile for JDs, and tops out around the 25th percentile. That pretty much wipes out the low-end earnings premium, without even considering that teachers will have much better benefits than a lawyer with a similar salary.
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Harper's article referenced in an earlier comment informs that (1) "Simkovic graduated from law school in 2007" and (2) Simkovic " ... spent the year before he joined Seton Hall University School of Law in 2010 as an associate at Davis Polk & Wardwell." Perhaps he clerked for a year or so, but that's not clear from the article.
A JD student - or a candidate - might consider this information in considering the S/M article. 2007 was the beginning of the Great Recession that openly surfaced with a roar in 2008. So Simkovic got in before the full effects of the Great Recession came into play in the economics of the legal profession. The reason Simkovic left Big Law are not clear from the article; but his one (1) year as an associate was during the time that the effects of the Great Recession were being felt in the economics of the legal profession. Perhaps Simkovic was not satisfied with the Big Law or perhaps he was always interested in a career in legal academia, where one is not pressed for billable hours and the need for bringing in clients to make it to a partnership level after 5, 7 or 10 years.
Perhaps someone with economic skills could apply/extrapolate from the S/M article to Simkovic's career in legal academia, assuming he stays on. While the S/M article provides economic detail to 2008 from sources that are independent, Simkovic has personal experience beyond that point for most of his legal career so far. Some JD students - or potential JD students - might consider that personal experience relevant to apply to themselves in evaluation post-2008 economic impacts on the legal profession..
I would assume that most would-be JDs could instead get a masters degree in education. A public school teacher with a masters in Pennsylvania has a salary that starts at the 10th percentile for JDs, and tops out around the 25th percentile. That pretty much wipes out the lowbuy fifa coins lol boost fifa 14 coins league of legends boosting
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