Archive for December, 2010

Cornell Journal of Law & Public Policy: Predatory Student Loan Lenders, Middle Class Hope for Upward Mobility, the Legal Industry and the Inevitable Bubble

As some potential law students continue to await LSAT scores, law school admissions or are wondering whether or not going to law school will give them that one chance at a better life, it would benefit you to read the following:

Being led to the slaughter

A law journal article: 20 Cornell Journal of Law & Public Policy 67 (2010)
Options for Student Loan Borrowers: A Derivatives-Based Proposal to Protect Students and Control Debt Fueled Inflation in the Higher Education Market, Michael C. Macchiarola; Arun Abraham

O.k. so this article is 72 pages, obviously I won’t delve into the entire piece but I am placing some introductory quotes in which the author is direct with failing legal industry and how the student loan industry are basically predators. He specifically discusses law schools and new lawyers are a bad investment. the author is a ‘distinguished lecturer.’ The author is a law professor and is honest enough to basically state that going to law school isn’t worth it. Do you 0Ls get it? one of your potential professors is telling you that LAW SCHOOL IS A BAD INVESTMENT!

Here are the Table of Contents for a very brief overview:
INTRODUCTION                                                                                                                                                                                                                                                    I. THE RUNAWAY COSTS OF AMERICAN LEGAL EDUCATION
By the Numbers
The Causes: A Combustible Mix of Accreditation,Rankings, Peculiar Incentives and Federal Encouragement
A Brief History of the Law School and Its Accreditation
The Rankings Game
The Peculiar Incentives of the Law School Faculty
The Federal Government and the Student Loan Market
The Scope of Government Involvement
Crisis in the Market and the Emergence of SAFRA
Income-Based Repayment and More of the Same
“For-Profit” Schools and a Way Forward

THE DISAPPOINTING REVENUE PICTURE FOR LAW SCHOOL GRADUATES
INFORMATION ASYMMETRIES AND ENTERPRISE LIABILITY
Informational Asymmetries Abound
Applying Lessons from Enterprise Liability Theory

Now for some introductory quotes:
Runaway tuitions and the burdensome student debt required for most Americans to obtain a post-secondary degree are under scrutiny like never before.4 Evidence is beginning to mount that, for too many students, debt-financed education represents a stifling encumbrance instead of the great investment that society’s collective commonsense has long advanced.5 Such a finding is unsurprising in light of the fact that, for too long, the value of education has been reflexively embraced without adequate examination of its cost. (p. 69-70)

As most bloggers have been stating, the cost is not worth the proposed benefit with all of the practical variables: economy, shrinking industry, inflation, lower salaries, loan payments and their capitalized interest as well as the time and psychological warfare this field demands.

The cost of attending law school, for example, has increased at two to three times the rate of inflation over the last three decades.11 The promise of accessible loans has made loan eligible middle- and lower-income students an easy mark for unabashed, aggressive student-loan marketing.12 “The end result,” in fact, “has been an unprecedented, debt-fueled wealth transfer from students of modest means to the increasingly prosperous higher education industry and opportunistic student loan lenders.” (p. 71-72)

Now deemed “McLaw” this along with LPOs and general outsourcing has set the middle class population in a cycle of perpetual financial slavery. Upward mobility is not founded in usurious personal debt. Do not think of the titles. Do not think of prestige. Think of your life and happiness and with any common sense you will decide not to attend law school.

Law Schools Are Not the Only Ones Paying Employers to Hire

Apparently this past summer the Maryland state government implemented a program called H.I.R.E. Maryland [http://dllr.state.md.us/]. Should you be one of the lucky unemployed Marylanders there is hope:

“Resources for Job Seekers
Maryland’s Hiring Incentive Rebate for Employers (index.shtml) can be used as an incentive to encourage employers to hire unemployed indivisuals.”

Should you be one of the struggling small businesses that are struggling in Maryland due to high business taxes and insurance rates and payments on your Small Business Administration Loan behold the light:

“What is the tax credit?
• The Hiring Incentive Rebate for Employers is a tax credit available to Maryland businesses that hire qualified workers for newly-created or certain vacant positions in the State.
•Employers will receive a maximum credit of $5,000, for each qualified employee, up to $250,000.

How does an employer qualify?
•Employees must be Maryland residents as well as hired between March 25, 2010 and December 31, 2010.
•At the time of hire, individuals must be receiving unemployment insurance benefits or have exhausted their benefits in the previous 12 months and not working full-time immediately preceding the date of hire.
•Positions must be full-time as well as newly-created or have been vacant for at least 6 months.

Where can I get more information?
For more information, visit the DLLRwebsite (index.shtml) or one of the 34 One Stop Career Centers (../employment/onestops.shtml).” [sic]

So employers must create a position in order to get the tax credit. Note that the credit is up to $5,000. This means that the credit can range from $1 to $5,000. I am sure that the conditions are set to ensure that most potential employers won’t receive the maximum. Also, would an employer, especially a small business think it is worth it to create a position for $5,000?
In Maryland most businesses are blue-collar, mall-type or state or local government jobs. So let’s focus on the first two types since the latter aren’t likely included. An average worker probably makes about $25,000-$40,000 a year (I’m being generous in this economy). That means that the owner has to be creative enough to generate MORE business revenue to cover the new employee’s salary in a failing economy, meaning should he/she be unable to the business would actually create an additional debt of $20,000 to $40,000. A small business that is able to generate that much more revenue wouldn’t need the incentive of $5,000.

Any average person in the DC-metro area knows that Maryland has a faltering business or job market. What I find interesting is that when I read economic stress maps or news about the DC area the author continues to make references to market/employment gains.

Maryland is over populated, overdeveloped and over-run by mob transplants ready to pillage whatever resources the state has. Years ago many medical practitioners moved out of Maryland because their medical malpractice insurance was increased to such a level they could not operate any more. Maryland does not have the foresight to attract corporations like northern Virginia does. Maryland seems to be concerned with more condos and mcmansions than how anyone can pay for it. It appears that many workers in Maryland are commuters from Philadelphia and Delaware, while many (professionals) commute to Washington, DC like northern Viriginians for employment. I doubt that this hiring incentive had any real impact for the unemployment rate overall, especially for displaced professionals.

Just Can’t Help It: The Rejection Letters Just Keep Flowing In

These rejecteion letters are apparently mechanically generated. Most of them are emailed, yes emailed. Nowadays a potential employer doesn’t see fit to ‘waste’ a .44 stamp to reject you:
____
Thank you for your interest in employment with the [Federal Agency]. You were highly qualified; however, you were not selected for this position.
Audit Code
NN
Code Definition
Not Selected – Not Contacted
Code Explanation
The selecting office has indicated that you were not selected or contacted for this position.

Thank you for your interest in Federal employment. You are encouraged to visit http://www.usajobs.gov to view additional Federal employment opportunities and information. PLEASE DO NOT RESPOND TO THIS MESSAGE. IT WAS GENERATED AUTOMATICALLY.
____
EL You are eligible for this specialty and grade.
Special Messages
The information shown on this Notice supersedes all information you received in earlier Notices from this examining
office for this occupation. PLEASE DO NOT RESPOND TO THIS EMAIL MESSAGE. IT IS AUTOMATICALLY GENERATED.
____
We have reviewed your application and found you qualified for the position listed above. However, you were not among the most highly qualified candidates. Therefore, your name will not be referred to the hiring officals at this time.

Thank you for your interest in employment at the [Federal Agency Headquarters]. PLEASE DO NOT RESPOND TO THIS MESSAGE. IT WAS GENERATED AUTOMATICALLY.
_____
The selecting office has indicated that you were not selected for the position. Thank you for your interest in [Federal Agency] employment. PLEASE DO NOT RESPOND TO THIS MESSAGE. IT WAS GENERATED AUTOMATICALLY.
_____
We have reviewed your application and found you qualified for the position listed above. Your name has been referred to the employing agency for consideration.

Any questions concerning interviews, physical examinations or other matters should be referred directly to the agency.
Thank you for your interest in Federal employment. You are encouraged to visit http://www.usajobs.gov to view additional Federal employment opportunities and information.

PLEASE DO NOT RESPOND TO THIS MESSAGE. IT WAS GENERATED AUTOMATICALLY.

US News & World Reports: (Law School) Know What You’re Getting Into

US News & World Reports
Ann Levine
November 22, 2010

I am proud to be a lawyer and I am proud to help other people reach their dream of becoming a lawyer. [sounds desparate to sell the profession]. However, there have been numerous stories recently that may discourage you from applying to law school. There are negative and disgruntled law students and attorneys warning you about the evils of law schools, of the profession, and of anyone remotely related to it. My goal is to make sure you don’t join that disgruntled bunch. [Which can simply be prevented by not attending law school]

So, if you decide to go to law school, you need to feel that the benefits outweigh the sacrifices and potential drawbacks that many of the naysayers routinely harp on. Go into it with your eyes wide open, ready to work hard, ready to make your way and create your own career. [Sounds like a tort in the beginning you are proceeding into a known danger and that it’s forseeable that you will have damages]. You won’t expect anyone to hand you a six figure job at graduation.

[This is such a misleading characterization, that most attorneys EXPECT six figures. No most attorneys expect after committing and investing time, money, effort and basically their life into achieving admittance into a noble profession that one can obtain a job in which one can have DECENT housing, food and transportation. The only graduates who really expect six figures upon graduation are those set for the patent bar, trust fund babies, IVY League graduates with connections.]

You will go into this with an understanding of the realities of the profession. You will know that success does not happen overnight, that your dream job isn’t the first job out of law school, but the one you hold ten years down the road. [false misrepresentation, how in the world can such a writer state this with a ‘straight face’ without submitting statistics or even state based on people he or she knows. It appears the author writes in theory or the same rhetoric that continues to be told to unsuspecting 0Ls.]
There is no fast track to success in law school or in anything else in life. The key is to make the best decisions you can about your future with the information you currently have at your disposal.

I want you to really consider whether to go to law school, and I want to share the questions you should be asking before you go. Plus, I want to make sure you are equipped to make good decisions about where to attend.

Let’s start here: Reasons NOT to Go to Law School:

1. Money (How much does law school cost and how can I pay for it?)

2. Time (three years full-time, 4 years part-time)

3. Bad career outlook in current economic environment

4. It’s difficult

5. It’s competitive

6. There are too many lawyers

It appears that 1, 3, 5, 6 are all related to NOT being able to get a job or make decent money with a law degree. Decent refers to enough money to sustain you and your family (whatever that may be) with food, gas, heat, electricity, housing and transportation. Four out of the six reality checks are stating that you cannot live a normal life with a law degree. So those of you who are already making $50,000-$75,000 without a law degree; you are in a much better position than most licensed American attorneys. So, does it make ANY sense to encumber your life with unnecessary debt to be in a profession with superficial professionalism, mentally disabled persons who many have broken down after realizing the reality of what going to law school has done to them, all while struggling to meet your monthly financial obligations and reaching for straws to keep a facade of upward mobility. Reason with yourself and don’t ignore the signs.

Points 2 and 4 are related to losing valuable years of your life to spend hours, days, weeks studying to impress law professors who already made their decisions of who each student is, where they will fall in the mandatory curve within the first week of classes, all the while subjecting students to the Socratic method with the intent of satisfying a power-trip. Now all professors are like this but most are. Your first year you do not select your law professors and many have tenure, so good luck in being treated fairly while learning about the law–ironic isn’t it?

Now, the Reasons TO Attend Law School:

1. Learning how to think

2. Profession you can always rely upon/Job security

3. Helping others/contributing to the community

4. Being important and respected

5. Financial security, prosperity

Points 2 and 5 do not make any sense in light of the previous set of points. Although most professions and both the private and public sector is suffering due to the current economy, the legal profession has forever changed. There is no such thing as financial security in general when there is a permanent oversaturation of law graduates and attorneys. Due to this saturation how can point 4 be valid? Value is based on quality and rarity. Many media outlets have exposed how unprepared most law graduates are and have been over the past few decades. When lawyers are a dime a dozen, how are you important? Though theoretically an attorney is to advocate, be a defender of the Constitution, etc, most attorneys are either focused on keeping their financial security which inevitably compromises the value of the services and as a result the profession. Additionally, when there is not a demand for a product or service, the price steadily decreases (oversaturation).

You need to do your research about each one of these pros and cons. How much can you expect to make in the area of law you plan on pursuing? What would your student loan payment be? Your rent? Your car payment? Etc.

So, how can you research this? Talk to lawyers in big firms, lawyers who work for the public defender, lawyers who work in a firm with only two or three attorneys, or insurance defense attorneys. Ask them how much they made in their first five years of practice and how much they made after ten years. Ask them what they really do all day. Ask them to describe a typical case they are working on. [A simple approach is to read these blogs. The following two questions are good suggestions though:]

Ask them what time they get to the office everyday and what time they leave. Ask them if they like their jobs.
Ask them where they went to law school. Did they take a scholarship to a lower ranked school? Why or why not?

Do top law schools open some doors? Do you want to clerk for the Supreme Court? Be a law professor? I suggest you look up people who have jobs you would like to have one day and see where they went to law school.

It’s essential you have a firm grasp on what the profession entails before you commit. Comparing and contrasting the answers to these questions with your expectations is key to helping you make your decision.

If you’ve gone through this thought process and you still decide to attend law school, you will know what you are getting yourself into. You will be in a position to make good decisions about your future. And then you’ll be ready to hear this podcast: How to Get Hired as a Rookie Attorney.

In other words you will definitely be “proceeding into a known danger.”