The piece lists four “myths” about why law school is a bad investment, and then purports to debunk these “myths” with “facts” that seem purposely chosen to completely miss the point and otherwise mislead people. It’s like Lawrence Mitchell on steroids, only without having to fool the New York Times.
I can’t begin to go through, line by line, and debunk all of these “facts” here — though if professor Paul Campos wants to eviscerate this mess, I’m sure he can do it before breakfast. But I do want to hone in on perhaps the dumbest thing here, just because it’s not an argument I think I’ve specifically addressed before.
So-called myth number three is that “[s]alaries earned by recent law graduates do not justify the cost of law school,” which Denver says can be debunked because the “lifelong returns” of a legal salary more than make up for the investment. That’s a poor argument because it assumes that “practicing law” is a thing that people will do for the rest of their lives, and it’s making a prediction about a future economy that, you know, doesn’t look all that predictable right now. And that doesn’t even get into the economic studies that show how a low first starting salary can cripple your lifelong earning potential. The section uses “averages,” which we all know are misleading, and compares people with J.D.s to undergrads, instead of comparing J.D. holders to other people who are willing to invest at least three additional years in their education. It’s a mess.
But that isn’t want I want to focus on. In the discussion, Denver admits that starting salary is in fact a legitimate way of looking at the investment in law school, and then they drop this on you (emphasis in the original):
But starting salary differentials can be a useful, if highly conservative, way to determine whether a JD is likely to increase your lifetime earnings enough to justify its cost. In 2011, the average starting salary for those with only an undergraduate degree was $42,987. So if your earnings differential remained constant (which, as noted above, is not likely), then to justify your investment in a JD in economic terms, you would need to find a job with a starting salary of $56,887 ($42,987 plus the required $13,900 premium).
Do you notice how that fast and loose math completely glosses over the fact that the undergraduate with a $43K a year job probably has SIGNIFICANTLY LESS DEBT than the law graduate with a $57K a year job? Christ in Texas on an Instrument, this section is supposed to be about debt, and when they do the math, they forget the debt (and the interest on said debt).
By the time they get back to the debt, they’re talking about the “lifelong earning” again and “averages,” but it’s still incredibly stupid:
If you compare the Denver Law average starting salary to the average starting salary of a person with only a bachelor’s degree, the average Denver Law graduate makes $27,935 more per year. And if you extend that difference over the course of a 40 year career (assuming the difference does not grow, which as noted above is unlikely), the current value of that difference is over $500,000 – double the $250,000 investment.
If you don’t understand why that is terrible math, I’m not sure I can help you, but I’m going to try. Even if you ignore Denver’s unhelpful reliance on averages, if you sink $250,000 into an investment for 40 freaking years and all you end up doing is doubling your money, you are a goddamn sucker. My friends at Dealbreaker say that the rule of 72 suggests you should double your money every seven to eight years at current rates. And let me tell you, the “average” return a Denver Law student is making over his “undergrad only” peer over the course of his 40-year legal career is not $8 million.
Really, Denver Law students are probably better off letting me invest their tuition nut while they spend 40 years working a job that gets them cost of living adjustments for inflation.
The bottom line is that Denver is making a stupid argument designed specifically to entice stupid people. It’s an argument that relies upon the reader’s ignorance of investment returns, opportunity costs, and inflation. You don’t invest $1 today to make $2 tomorrow. More importantly, you don’t invest $1 and three years of your freaking life today to make $2 over the course of the next 40 years. Only dumb people who are terrible at math could possibly find this argument persuasive.
But the case for going to law school has nothing to do with “changing the world,” and it certainly isn’t based on the “average” ROI at a school like Denver. Unfortunately, many law schools have taken themselves out of the conversation of why someone “should” go to law school with their ridiculous, intellectually dishonest attempts to justify their shockingly high tuition.
President & Dean Mihaly’s Response to New York Times Story [Vermont Law School]
Four Ways to Fix Law School [U.S. News & World Report]
Why Now is the Time to Apply to Denver Law [Sturm College of Law]