Do you hear that sound? It’s the sound of the music stopping. It’s the sound of a tap running dry. Law schools are living in an F. Scott Fitzgerald novel, and the party is wrapping up.
Professor Paul Campos estimates that 80 to 85 percent of law school are operating at a loss right now. Cratering law school applications put a stop on federally backed loan money that has been used to prop up outrageous law school tuition for years. In most industries, such realities would spur creative and substantive reform. Smart people would try to do something to fix the industry. Instead, people running law schools don’t think like that even when they have an opportunity for clarity.
As Fitzgerald writes: “arid for a moment people set down their glasses in country clubs and speak-easies and thought of their old best dreams. Maybe there was a way out by flying, maybe our restless blood could find frontiers in the illimitable air. But by that time we were all pretty well committed; and the Jazz Age continued; we would all have one more.”
Maybe all deans can do now is to play it out to the bitter end….
As we mentioned in Non-Sequiturs last night, JPMorgan Chase is getting out of the student loan business. The bank will stop accepting new student loan applications this October.
A spokesperson for the bank said: “Students and their families are increasingly relying on government-backed loans rather than private student loans, and as a result the market has declined by 75% in the last five years.”
My friends, this is a bad sign. JPM is just a minor player in the student loan game, but the fact that they don’t think lending money to students for education is a good business anymore should make us worried. The fact that the federal government has crowded out this private lender is not good.
It means that we’re one step closer to the whole student loan bubble bursting…
You might remember Matt Taibbi from such hits as “F@$% Goldman Sachs” and “Wall Street Trades Soylent Green.” He is a blistering critic of… everything.
In an upcoming Rolling Stone article, Taibbi has turned his withering gaze to the student loan industry. He criticizes Democrats, Republicans, and President Obama. Taibbi points out Obama’s hypocrisy on the student loan issue, something that I’ve been doing since 2009, but on this issue, the more the merrier.
While Taibbi’s article focuses on the crisis as it applies to college students, he can’t help but include some examples from the legal industry. I think that’s because no matter how much colleges and universities take advantage of college kids, law schools are worse….
With the Notre Dame Fighting Irish’s attempt to win their first national championship in a quarter of a century, and at the same time, their attempt to end the Southeastern Conference’s years of dominance of the BCS, I am hoping that this return to glory by a once storied franchise will be accompanied by a return to glory for the storied legal profession.
When I was growing up, most thought of lawyers as highly educated, intelligent, and self-motivated (even to a fault) professionals. Many considered lawyers to be part of the upper echelon of society, and most people also believed that simply being a lawyer would result in a huge, guaranteed payday. And for most of college football history, the Fighting Irish received similarly high praise.
In recent years, however, both the legal profession and the Irish have been held up to strong criticism, and were unable to enjoy the same success people became accustomed to. Even while I was still in law school at my TTT, respected attorneys told me not to worry about the school I was attending, because by the time that I got to my second or third job, no one would care anymore. The little detail that everyone left out was just how much it would matter for that first job — because it’s rough to get to the second or third job when you can’t even find your first, no matter how hard you try.
Going along with the Fighting Irish’s return to the top, here’s a look at a few other things that were once closely associated with the legal profession that are no longer true, but would be welcomed back with open arms….
Here at Above the Law, we frequently address law school loan debt and the many ways it has screwed over various members of the legal profession, including some of our own editors. As many of you know, both Elie and I graduated from law school with six figures of loan debt. And although we both have a seemingly insurmountable pile of debt to pay off, we’ve gone about doing so in different ways. He’s been paying collection agencies not to break his knees since 2007, and I’ve been paying my loans like a good little indentured servant since 2010.
But I’ve got to admit, that wouldn’t even be possible if it weren’t for income-based repayment (IBR), the magical plan that caps your payments at 15 percent of your discretionary income. With IBR, I’ve been able to continue making interest-only payments for about two years, gleefully awaiting the day that I’ll finally be able to dig into the principal amount — which will likely never happen, but hey, a girl can dream.
The pesky thing about IBR is that you have to reapply each year to tell your loan servicer that yes, you’re still ridiculously poor, and no, you still can’t afford to pay those insane amounts they’d expect you to fork over otherwise. I sent in my reapplication packet more than a month ago, specifically so that I’d know what my new payment amount would be for the upcoming bill’s due date.
So you can imagine my COMPLETE AND UTTER shock when I opened my mail this morning to see that with my glamorous “entry-level journalism salary,” I’d apparently been kicked off of my IBR plan.
Ed. note: Gradenfreude is a new series chronicling a recent law school graduate’s life after attending an unranked school. Feel free to email the author at TristanTaylorThomas@gmail.com, and he’ll respond ASAP. After all, it’s not like he has anything better to do.
When President Obama was debating Mitt Romney, he patted himself on the back because of the strides he took to give young people the chance to get an education by making student loans available. I guess making loans available is all that really matters, because after all, who cares about having the loans paid off? That’s the one thing that he didn’t mention: once you accept the loans, you’ll be bent over a barrel for the rest of your life — unless, of course, you’re able to become a Senator and then write a couple of best-selling books.
I think that most students realize they’ll spend the vast majority of their lives paying off the loans they took out to further their educational pursuits. What many may not realize is just how ridiculous the government is when it comes to getting their money back. Their tactics and terms fall just short of being classified as Mafia-like. On the bright side, if there is one, at least no one’s broken my legs yet.
Although the government may allow for a deferment for economic hardship, if you have a full time job, it’s likely that you won’t meet the strict requirements to attain that deferment. Because even when you work a job that only allows you to live in your parents’ basement, essentially as dependent upon them as you were in high school, the fine United States government still expects timely repayment.
That’s right: I currently make too much money to qualify for an economic hardship deferment, and I work for just over minimum wage. Earning the least amount of money per hour that I ever have in my life, I am making too much money to earn the government’s pity….
I’ve said countless times that discharging student debts through bankruptcy is nearly impossible because you must make a showing of “undue hardship.”
Showing undue hardship is a very high bar, and it takes a very long time. Prospective law students don’t really understand the difference between student loan debt and something like credit card debt until it’s way too late. And even when it’s too late, most people (and many lawyers) feel that it’s not even worth trying to convince a bankruptcy judge that a person holding a J.D. has the “certainty of hopelessness” required to get student debts discharged.
But an article this weekend in the New York Times suggested that more people should give “undue hardship” a whirl. Sure, the guy the Times chose to feature is freaking blind, but even absent a physical disability, the article suggests that undue hardship might be a real possibility for most people.
Hey, it doesn’t hurt to try. At least, it hurts less than the likely plan B of stabbing out your own eyes….
* Dominique Strauss-Kahn’s lawyer has a challenge for you: “I defy you to tell the difference between a naked prostitute and any other naked woman.” [Dealbreaker]
* It’s not often that Cravath partners leave for other firms, but it happens. Jeffrey Smith, former head of the environmental practice at Cravath, recently decamped for Crowell & Moring. [Am Law Daily]
* If you’re a trusts and estates lawyer or a reader of fiction, consider checking out this well-reviewed new novel by Patrick James O’Connor, which takes the form of an extended last will and testament. [Amazon (affiliate link)]
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: firstname.lastname@example.org.
We currently have a very exciting and rare type of in-house opening in China at one of the world’s leading internet and social media companies. Our client is looking for an IP Transactional / TMT / Licensing attorney with 2 to 6 years experience. The new hire will be based in Shenzhen or Shanghai. Mandarin is not required (deal documentation will be in English) but is preferred. A solid reason to be in China and a commitment to that market is required of course. This new hire will likely be US qualified (but could also be qualified in UK or other jurisdictions) and with experience and training at a top law firm’s IP transactional / TMT practice and could be currently at a law firm or in-house. Qualified candidates currently Asia based, Europe based or US based will be considered. The new hire’s supervisors in this technology transactions in-house team are very well regarded US trained IP transactional lawyers, with substantial experience at Silicon Valley firms. The culture and atmosphere in this in-house group and the company in general is entrepreneurial, team oriented, and the work is cutting edge, even for a cutting edge industry. The upside of being in an important strategic in-house position in this fast growing and world leading internet company is of the “sky is the limit” variety. Its a very exciting place to be in China for a rising IP transactional lawyer in our opinion, for many reasons beyond the basic info we can share here in this ad / post. This is a special A+ opportunity.
If your firm is in ‘go’ mode when it comes to recruiting lateral partners with loyal clients, then take this quiz to see how well you measure up. Keep track of your ‘yes’ and ‘no’ responses.
1. Does your firm have a clearly defined strategy of practice groups that are priorities of growth for your office? Nothing gets done by random chance, but with a clear vision for the future. Identify the top practice areas for which you wish to add lateral partners. Seek input from practice group leaders and get specifics on needs, outcomes, and ideal target profiles.
2. In addition to clarifying your firm’s growth strategy, are you still open to the hire of a partner outside of your plan? I’ve made several placements that fit this category. The partner’s practice was not within the strategic growth plan of my client, but once the two parties started talking with each other, we all saw how it could indeed be a seamless fit. Be open to “Opportunistic Hires.” You never know where your next producing partner might come from, so you have to be open to it. I will be the first to admit that there is a quirky element of randomness in recruiting.
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