The "Fight Club" Solution
If there is one factor that ties most attorneys into the current market crisis: it's called "law school debt." Almost every young associate has a significant amount of money they still owe their hyper-expensive professional school (and if you don't, I hope your trust fund is tanking right now). For many, that debt drives them into the open arms of Biglaw.
The National Law Journal reports that current and prospective law students are about to get credit-crunched:
But because banks are doling out less money to lenders, private loans are getting harder to come by, said New York Law School Dean Richard Matasar, who is also chairman of the board of directors of education lender Access Group.That means it will be more difficult for law school graduates to secure private loans, and graduates will likely pay higher interest rates if they do get a private loan to bridge the gap between graduation and the bar.
Recent law graduates also will be entering the workforce during a slow economy, which means they may spend more time in the job search process.
We've reported that some firms have pushed back their starting dates, which will likely cause recent graduates to rely even more heavily on loans.
But as with everything else going on in the markets right now, nobody really knows what is going to happen. The WSJ Law Blog asks a pertinent question:
We know that those bar-takers with BigLaw jobs lined up can ask their firms for a hefty advance on their first year salaries. But others must rely on private loans to fund the two or three month stretch between graduation and the bar exam. We're curious: Have rates on those loans gone up? Are post-grads still relying on them?
After the jump, it's time to talk about solutions:
The NLJ urges caution:
It's complicated to predict how the current changes in the economy will impact law students, Matasar said."It's a time for caution. It's a time for students to plan well for how much debt they are taking on and how they will pay for it," he said.
But what does "caution" actually mean? Should students not go to the best school they can get into? Everybody wants to be debt free, but unemployment is a bitch.
For associates already working and paying off their debt, the only thing one can really hope for is the successful completion of Project Mayhem. If the bad investments of some are going to be forgiven, why not the bad investments of all? Take everybody's credit back to zero and just start over:
An entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need. We're the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War's a spiritual war... our Great Depression is our lives. We've all been raised on television to believe that one day we'd all be millionaires, and movie gods, and rock stars. But we won't. And we're slowly learning that fact. And we're very, very pissed off.
Wall Street meltdown could affect law students nearing graduation [National Law Journal]
The Credit Crisis and Law School Loans: Take One [WSJ Law Blog]
(80) Comments
firsty
"ask their firm for a hefty advance..." not here.
You don't ask for a "hefty advance," you ask for a hefty bonus at the time of graduation. I mean, every firm gives 10k bonuses, right?
If Dean Matasar thinks students will have a problem paying for his TTT law school, then he shouldn't have raised the tuition from around $24,000 in 2001 to $42,500 in 2008.
I'm sure law students are happy to pay an extra $20,000 a year to take class in brand new law school building and library.
If Dean Matasar thinks students will have a problem paying for his TTT law school, then he shouldn't have raised the tuition from around $24,000 in 2001 to $42,500 in 2008.
I'm sure law students are happy to pay an extra $20,000 a year to take class in brand new law school building and library.
2005 grad here, with private loans remaining. Anyone have any ideas as to whether those (variable) interest rates are likely to rise?
Elie, why are you hatin' on people without huge law school debt? Some of us went to public law schools and still landed biglaw gigs without huge debt burdens. Although I have no trust fund, I resent your ill-will to those who are invested in the stock market. BRING BACK LAT!
I am Jack's law school debt.
3- My TTT firm gave us a $10K "advance" which we then had to pay back via deductions from subsequent paychecks...
7 - I hate you because of who you are.
Does anyone know whether Project Mayhem has acquired the second GoldenEye satellite? If so, I have a reliable source that says the launch codes are on Janek's desk between the pencil jar and the lamp.
Richard Matasar = epitome of TTT
FIRST to point out that attorneys at WILDMAN HARROLD never have any problems paying their student loans!!!
Wow. This post felt forced and awkward.
Nice job, Elie! You're doing a great job at continuing to suck.
1, you missed a golden opportunity to say, "I am Jack's firsty."
Dearest Benjamin N. Cardozo School of Law,
Thank you, thank you, thank you for the free ride.
7 - good for you. (I'm being sarcastic).
Choose life. Choose a job. Choose a career. Choose a family, Choose a fucking big television, Choose washing machines, cars, compact disc players, and electrical tin openers.
ATTORNEY GENERAL'S WARNING: Practicing Law May Result in Anal Bruising, Fecal Rhinitis, Weight Gain, Mood Disorders, Slutism, Panic Attacks and Mild Itching.
Choose to not go to law school...
Hey ATL
You're not your job. You're not how much money you have in the bank. You're not the car you drive. You're not the contents of your wallet. You're not your fu*king khakis. You're the all-singing, all-dancing crap of the world.
Elie: Project Mayhem's target was not the credit market, but was actually the natural history museum which would have been crushed by the collapsing building, if only Tyler wasn't so fond of using parafin. Parafin never worked.
Now, Eli, a question of etiquette - as I pass, do I give you the ass or the crotch?
Public school or not...three years without a year-round income puts you in serious debt (absent trust fund or daddy's wallet). Sure tuition might only be $13k a year, but with cost of living you're still in the whole for $30k + interest a year.
Prestige whores deserve the debt. Choose a slightly less "elite" school; you'll save a ton of money and probably get a better practical legal education.
Citibank, I want you to have my abortion.
I am Jack's complete lack of surprise
Prestige whores deserve the debt. Choose a slightly less "elite" school; you'll save a ton of money and probably get a better practical legal education.
". . . and probably get a better practical legal education."
Huh?
21 = socialist
Prestige whores deserve the debt. Choose a slightly less "elite" school; you'll save a ton of money and probably get a better practical legal education.
"practical legal education" = oxymoron
25 - I am not a prestige whore. It is just that I am superior to you because you went to a school that is not highly ranked by USN&WR. You are therefore worthy of my contempt, and I will insult you with a series of Ts. Also, though I am a mid-level associate/ abuse junkie, I am better than you because partners at my firm receive substantial profits from their (my) work.
I didn't think actual biglaw made you take an advance?
I am Jack's wasted life.
Doesn't it seems fishy (at best) that a law school's dean is also in charge of the company responsible for most law students' crushing debt?
It seems like there's a serious conflict of interests in that situation
NYC (tuition) to 190K!
I am Jack's complete lack of surprise
What's with all the prestige whore hate? They go to good schools and make bank at good firms.
The people who are having trouble go to TTT's, like NYLS, that charge as much as the prestigious schools. Any prestige whore who only got into NYLS would kill himself rather than face the humiliation of having to go to a TTT.
NOT A PROPER USE OF THE COLON IN FIRST SENTENCE.
Surprised that it took 8 minutes for the first TTT comment....
-NYLS 3L
All: I'm a college senior thinking about his next move. I have an offer at a place where I interned that pays $60K, but I'm also thinking about going to law school. Is there a cutoff (T15?) where the risks of failing to get a job outweigh the debt? I won't have a hard science degree or CPA. I guess this might be a little tough for people to calculate, but I think the collective wisdom of this group can at least help me. Plz handle thx!
41: take the job and stay the hell away from law school unless you get into a top 25 or a state school. otherwise, the opportunity costs and debt will never make law school worth it. it was a tough call for me years ago, but it's very likely that the credit crunch will make borrowing more expensive: i wouldn't go to law school in the current environment.
I would say private schools in the top 20, or public schools in the top 50, are worth going to.
Other than that, it doesn't make sense if you are making a purely $$$ decision. That said, if you go into law just looking for $$$ you are going to have the miserable existence that about 80% of lawyers have.
32--You're comment is absurd. I'd be willing to bet (I take 70/30 odds) that you didn't go to a T1. However, let's move to the substance of the comment. I went to a T3 at a serious value (my law school debt amounts to only $60K, after factoring scholarships), and my total of undergrad and law debt is $100K. If you did go to T1 (I had a transfer offer from UVA, by the way, so I base this on my own calculations) and you had to pay for it yourself, you have anywhere between $225 and $400K in debt.
Even with my T3 experience, I had clerkships with bankruptcy and CA, very meaningful, though certainly a cut in salary, and I am now looking at offers from firms with 50K bonuses and starting as a 3rd-year associate (with the pay increase and all).
So, explain to me, then, how you have been able to do better than me? Unless you clerked SCOTUS, you couldn't have done any better. And I did it for much less. And, mind you, I got through interviews with pointed questions by pricks like yourself who doubted my skills based solely on my T3 law degree.
Point is, there is much more to this game than T1 v. T4. And, based on your comments and your taking a comment such as "prestige whore" so offensively, I probably came out of the gate a bit more grounded than you, which is one of the most useful skills a young attorney can have, according to some, if for no other reason than my ability to put out, rather than amplify, fires that may burn vital bridges later.
32--You're comment is absurd. I'd be willing to bet (I take 70/30 odds) that you didn't go to a T1. However, let's move to the substance of the comment. I went to a T3 at a serious value (my law school debt amounts to only $60K, after factoring scholarships), and my total of undergrad and law debt is $100K. If you did go to T1 (I had a transfer offer from UVA, by the way, so I base this on my own calculations) and you had to pay for it yourself, you have anywhere between $225 and $400K in debt.
Even with my T3 experience, I had clerkships with bankruptcy and CA, very meaningful, though certainly a cut in salary, and I am now looking at offers from firms with 50K bonuses and starting as a 3rd-year associate (with the pay increase and all).
So, explain to me, then, how you have been able to do better than me? Unless you clerked SCOTUS, you couldn't have done any better. And I did it for much less. And, mind you, I got through interviews with pointed questions by pricks like yourself who doubted my skills based solely on my T3 law degree.
Point is, there is much more to this game than T1 v. T4. And, based on your comments and your taking a comment such as "prestige whore" so offensively, I probably came out of the gate a bit more grounded than you, which is one of the most useful skills a young attorney can have, according to some, if for no other reason than my ability to put out, rather than amplify, fires that may burn vital bridges later.
I went to a top 50 public school and came out with around 55k of debt, with an interest rate of 1.75% (graduated in 2005 and consolidated then). I don't make a BigLaw salary but the debt is very manageable. I have similar classmates who do make BigLaw salary with similar debt so it's not even a drop in the bucket to them. Be very careful where you go to school; while you can get a great job coming out of T2 - T4 schools, you are not likely to, since you need to be at the top of the class.
As for my own comment (at 44 and 45), I'm sure the improper use of you're (as opposed to your) and my accidental double-posting really lend to my credibility, so I figured I'd call myself out and beat anyone else to the punch.
I'll bite.
Good luck with that application with an extra few thousand applications flooding the market from people who have some work experience.
This won't last for 3 years #41 (Fingers Crossed). Eventually the economy will turn around and the need for attorneys will again increase. Roll the dice if you get into a T1.
41 - I was a sociology major in college and I am a 2L at a school in the 60s. I'll be getting paid the same as anyone from a T15 school this summer (160k) and I'll graduate with half the debt. If you don't get into one of those top schools, hope is not lost. The risks definitely do not outweigh the debt.
32 - Wait a minute. You're saying you're better than 25 because other people take credit for, and profit more from, your work? Yeah, I'm sure that's why you went to HYS.
Dear 44, 45, and 47. Thank you for the detailed analysis. I question whether being "grounded out of the gate" is a skill. But the ability to identify sarcasm is a skill, and you are wanting in that category.
Sincerely, 32
32 and 52--I am always obliged to provide detailed analysis. In my haste, I did not see the obvious sarcasm dripping from that comment. My apologies for a blunt response.
And, I stand corrected, being "grounded out of the gate" is more a trait than a skill, still useful nonetheless.
However, after having to hear the tier 3 jokes time and time again, I wonder if you might forgive such a hasty response.
Best, 44, 45 and 47
41, take the 60k for at least a year or two and consider your options. Most lawyers make 60k. Why not do it wouth the expense of law school? This is a no-brainer to me.
51: That's terrible advice. Just because you made it to Biglaw from a ~60s law school, you're going to encourage others to try the same? Are you not seeing the vast majority of your classmates not getting Biglaw jobs? Are they even getting mid-law or small-law jobs?
Here are the benefits of carrying the TTT Card:
1. Three years in school without earning income and picking up debt
2. Did not get into a T14 school so as to have good job prospects (if you did get into one, then MAYBE you could justify going to a lower ranked school on a full ride)
3. And ask yourself, if you did not have the credentials to get into a good law school, what makes you think you'll be in the top 10% necessary to get a high paying job? Because you'll be so much more motivated than everyone else?
End result: Jobless
50-
"I'll be getting paid..." Do they teach writing at your school in the 60s?
Absolutely take the 60k job for at least a couple years. That is great starting pay right out of undergrad, for pretty much any major. Also, after a couple years in the real world, you will be refreshed and ready to hit the books. I went straight through from undergrad and I was totally dragging ass because of it; I was so sick of studying! The older students were eager to learn and on average the older students did better than the younger students in my class. Like 54 says, this is without a doubt a no-brainer, and you are lucky to be in this position!
Since this has turned into an advice column, I have a question. Graduated in 2007, still haven't consolidated. Should I?
Above is a diatribe of people who have lost their grip on reality. Life is short, make sure you enjoy it. If you don't like where or who you are, change. We are a generation of blamers and complainers. Tired of choosing? Make your lives simple. Move to Thailand, live in a hut and catch fish.
58--Federal or private? I tried consolidating my federal loans, and companies, even 6 months ago, wouldn't touch it. It probably has something to do with the federal protections and interest rates being more burdensome upon lenders. Then, I realized DirectLoans sends one bill anyway, so what would be the practical difference.
One thing you should never do, in case you don't know already, is to consolidate federal and private, because your federal loans lose the federal benefits (interest rate, graduated extended repayment options, etc.).
Private loans might be consolidated, but I'd think you'd be hard pressed to find a lender willing to consolidate without giving you a pretty high interest rate.
Elie, would you please brush up on how to use pronoun referents? Two of your posts from this afternoon make this elementary mistake.
His name is Robert Paulson.
60,
I have both. Would only consolidate my federal ones, though. Was under the impression that consolidating private wasn't normally done (and I don't have that much in private anyway -- should concentrate on paying those down first though).
58
Does anyone else find it ridiculous that the interest rate for federal loans for 2007 are 6.8% whereas private loans are 4.5%?
62 - Nice.
Robert Paulson >>> Hank Paulson
from now on new law schools will avoid the letter 't' in the name is as to avoid derision as a TTT on ATL comment sections
New York UniversiTTTy School of Law
58 - wait until rates reset this summer and then consolidate. The economy will still be bad by then and interest rates will be lower.
58, 67, you're trolling for some sleazy student loan company aren't you? haven't you gone out of business yet?
58, 67, you're trolling for some sleazy student loan company aren't you? haven't you gone out of business yet?
50: The risks did not outweigh the benefits FOR YOU. The same cannot be said for the majority of your classmates. Saying "[t]he risks definitely do not outweigh the debt" based on a sample size of one (i.e., yourself) is misleading.
Make a couple of payments on your loans then stop. Call your Congressperson and ask for a bailout. Take the bailout money and run.
I don't know what the big deal is about student loans. I graduated last spring debt-free. All thanks to my wife's substantial inheritance - a trust funded entirely with Wachovia stock.
44: Good for you. But you miss the entire point that you essentially have to be in the top 5 PEOPLE in your class to do that well. That means your job prospects ride on every single law school exam.
You can get a good job out of a top 25 school, BUT you have to have excellent grades and find a way to get a foot in the door. For some people, that's way too risky.
If you can afford it, always go to the best school you get in. Period. And if it's not that great a school, don't go.
44, I am fairly sure that 32 was flaming for the express purpose of pissing you off royally. And you misspelled "your".
It doesn't matter anyway. I went to Florida Coastal and my life is totally pimped out -- gold E500, beach house in Naples, the works. Your career is what you make of it.
ouch, summer after 3L should be a stipend/bonus, not an advance...
Is a $10K bar bonus really all you BigLaw tools get? That's what my regional rocky mtn firm pays, and I'll actually be counted on to depose people and argue motions in the first year. And no, I won't have to pay the stipend back.
41, stay the hell away from law school! I did the state school thing and it was a knife fight the first year. If the three top ranked students hadn't transferred after 1L I'd have missed the cut for lucrative jobs. I'm a big proponent of the "one and done" philosophy. If you're outside of the T25, either grade onto law review after the first year or immediately hit "EJECT!" unless you want a gov't/public interest job or money isn't a concern.
44/45
I did better. Full ride under grad, full ride law school (t14). About 10k in loans. No rich parents. Just worked in undergrad and as summer associate in law school. Now make bookoos as 6th year associate in big firm (230k).
Before any idiots start screaming about aff action, I'm a very ordinary white girl.
I hate my job, but I am way, way, far and away superior to you.
your post was dumb
77 - I hope your post is a joke, a la 32's. And what are you doing posting at 2:24 AM? Even if you're on the wrong coast, that's a problem.
78, I thought the same thing about 77's post.
I also wondered whether a 6th year associate (roughly 30-32 if she went straight through), is still in the office at 2:30 a.m., and if so, whether she is billing that time to the firm.
Also, does it detract from the credibility of the poster that she refers to herself as a white "girl" when having been a professional for 6 years instead of referring to herself as a "woman"?
And why the forced reference to rebut "screaming about aff[irmative] action" when no "idiots" had been screaming about it in the first place?
The first rule of Project Mayhem is not to ask questions.