Posts Tagged ‘debt’

Law Review Roundup

Although the law school blogs have put forth great effort in warning the general public, mainstream news media outlets have begun to address the issue. For those who shrieked that scam bloggers were emotional, dramatic and weren’t basing their information on facts, we have over time, demonstrated the latter to be false. Of course one would be emotional when statististcs demonstrate that one was duped in a fraudulent scheme of the higher education industrial complex while the student loan business has produced generations of indentured servants reduced to menial labor and the contempt of the public who already have a disdain for lawyers. 

The following is a short list of primarily ACADEMIC refereed law journal articles addressing the law school scam, student loans and law school, law school scam blogs and the call for reform of the law school for-profit industry. This was not just a temporal problem nor the call for reform a fad by disgruntled attorneys/recent law graduates. This demonstrates a fundamental need for a paradigm shift in the way law schools fraudulently represent job statistics, benefits of attending and not attending law schools, and the basic requirement to address the next round of defaults: student loans. 

The reality is that the legal industry has greatly declined due to mass production business model characterized by LPOs and increased usage of temporary attorneys. 

Anyway, here is the list of law review articles:

Redeeming a Lost Generation: ‘The Year of Law School Litigation’ and the Future of the Law School Transparency Movement 88 Indiana Law Journal 773 (2013). http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2134009

You’re Doing It Wrong: How the Anti-Law School Scam Blogging Movement Can Shape the Legal Profession, Lucille A. Jewel. 12.1 Minnesota Journal of Law, Science & Technology 239 (2013).
http://mjlst.umn.edu/prod/groups/ahc/@pub/@ahc/@mjlst/documents/asset/ahc_asset_366141.pdf

What Ails the Law Schools, Paul Horowitz, 111 Michigan Law Review 955 (2013)
http://www.michiganlawreview.org/assets/pdfs/111/6/Horwitz.pdf

Perspectives on Legal Education Reform: The Crisis in Legal Education: Dabbling in Disaster Planning, K.P. McEntee, et al. 46 U. Mich. J.L. Reform 225 (2012).
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2188668

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. 20 Cornell Journal of Law & Public Policy 67 (2010).
http://www.lawschool.cornell.edu/research/JLPP/upload/CJP102-Macchiarola-Abraham-2.pdf

The National Law Journal, “Consensus Emerging that Law School Model Is ‘Is Not Sustainable’ ” (2010)

Quicklist PART II: Law School is a Bad Investment News Articles

Quicklist PART II: Law School is a Bad Investment News Articles
Too Many Law Schools and Law School: A Poor Investment:
2013 Mainstream News Articles List

These news articles are provided for quick reference as similar issues have been addressed in depth in prior posts:

07/24/2013: Tampa Bay Times, Blumner: Laying down the law school, Robyn E. Blumner
http://www.tampabay.com/opinion/columns/laying-down-the-law-school/2132968

07/22/2013:
Bloomberg News, When Law School is No Longer a Safe Bet
http://www.bloomberg.com/news/2013-07-22/when-law-is-no-longer-a-safe-bet.html

07/19/2013:
The Nashville Ledger, The Case of the Shrinking Law Schools:
Enrollment slides as sotential students argue costs v. benefits
Friday, Vol. 37, No. 29
Jeannie Naujeck
http://www.nashvilleledger.com/editorial/ArticleEmail.aspx?id=67645

04/25/2013: Foreign Policy, Should You Go to Law School?
The good, the bad, and the ugly about getting a J.D., Rosa Brooks
http://www.foreignpolicy.com/articles/2013/04/25/should_you_go_to_law_school

04/05/2013:  The Huffington Post, If Law School Affordability Doesn’t Improve, Enrollment Will Continue To Decline: Analysis,Tyler Kingkade
http://www.huffingtonpost.com/2013/04/05/law-school-affordability-enrollment_n_3023091.html

03/21/2013: CNBC, Courtroom Drama: Too Many Lawyers, Too Few Jobs, Mark Koba
http://www.cnbc.com/id/100569350

03/14/2013
Washington Monthly, Why Law School Doesn’t Work Anymore, Daniel Luzer
http://www.washingtonmonthly.com/political-animal-a/2013_03/why_law_school_doesnt_work_any043593.php

Bloomberg’s News Article, Death of the Legal Industry and its Obituary

Law school No Longer a Safe Safe Bet
http://www.bloomberg.com/news/2013-07-22/when-law-is-no-longer-a-safe-bet.html
Bloomberg News

Although the article seems to mourn associates and their high salaries which the author recognizes is only a small percentage of actual attorneys, it gives the reader a backlash if you are a law graduate. It references how white collar employees who demeaned or look down upon blue collar workers in the 1950s who chose to forego higher education. This portion is distasteful as many law graduates who graduated before the 2008 economic collapse but in the late 1990s or later had nothing to do with 1950s social stigma as they were not even born and just emphasizes what I pointed out in the last point that no one cares what happens to attorneys as society has nearly always relegated practitioners as underhanded, spoiled, backstabbers and overpaid. The author basically gives a “middle finger” to attorneys and reflects why there is lack of support of reform from the accrediting agencies to those on Capitol Hill. The article did however discussed the legal industry as dead (yet more confirmation from mainstream media) and even wrote its obituary. A portion of the news article is displayed below:
_______________________________________________________

When I was contemplating becoming an English major, lo these many years ago, one helpful counselor told me that despite the stereotypes, English majors had lots of job opportunities. Advertising, public relations, academia. “And there’s always law school!” she said chirpily.
I didn’t end up going to law school; instead, after graduating, I embarked on a peripatetic odyssey of jobs and graduate school that culminated in my becoming a journalist. But I can imagine an alternative universe in which I did go to law school. Law school has long been the backup plan for humanities majors who don’t quite dare to apply for food stamps.
That era appears to be ending. Noam Scheiber writes the obituary:
“‘Stable’ is not the way anyone would describe a legal career today. In the past decade, twelve major firms with more than 1,000 partners between them have collapsed entirely. The surviving lawyers live in fear of suffering a similar fate, driving them to ever-more humiliating lengths to edge out rivals for business. ‘They were cold-calling,’ says the lawyer whose firm once turned down no-name clients. And the competition isn’t just external. Partners routinely make pitches behind the backs of colleagues with ties to a client. They hoard work for themselves even when it requires the expertise of a fellow partner. They seize credit for business that younger colleagues bring in.
“And then there are the indignities inflicted on new lawyers, known as associates. The odds are increasingly long that a recent law-school grad will find a job. Five years ago, during a recession, American law schools produced 43,600 graduates and 75 percent had positions as lawyers within nine months. Last year, the numbers were 46,500 and 64 percent. In addition to the emotional toll unemployment exacts, it is often financially ruinous. The average law student graduates $100,000 in debt.
“Meanwhile, those lucky enough to have a job are constantly reminded of their expendability. ‘I knew people who had month-to-month leases who were making $200,000 a year,’ says an associate who joined a New York firm in 2010. They are barred from meetings and conference calls to hold down a client’s bill, even pulled off of cases entirely. They regularly face mass layoffs. Many of the tasks they performed until five or ten years ago—like reviewing hundreds of pages of documents—are outsourced to a reserve army of contract attorneys, who toil away at one-third the pay. ‘All these people kept on going into this empty office,’ recalls a former associate at a Washington firm. ‘No one introduced them. They were on the floor wearing business suits. … It was extremely creepy.’ Still, any associate tempted to resent these scabs should consider the following: Legal software is rapidly replacing them, too.”

Too Little Too Late Part II: ABA Journal Article

A recent blurb was published in the online ABA Journal positing the question of how to improve law schools. One of the highlighted suggestions included reducing the cost of a law school education. This will have a two fold negative effect: 1) As law schools are already discharging and furloughing support staff and adjunct faculty to further reduce costs will increase the loss of non tenured faculty and support staff (I know reader, I heard you chuckle) 2) Will lower the standards of a law school education which will make the law degree worth even less than it is now, as many law graduates learned the hard way. Ironically, it is published by the very law school accrediting agency that is responsible for the glut of attorneys that’s been happening for decades. Those who are in a position to implement change can start by not accrediting any more law schools and it is now time to shut down many of them. The measurement of success is not just in a constricted market but does the law degree hold value when the economy enjoys economic progress. For most, the answer is “no” as the problem existed for decades cloaked under false employment statistics and contract work. For many law schools the following suggestions is akin to performing CPR after the person has died.
I hope you enjoy the comic relief:
____________________________________
How to improve law school? Required clinical training, capped loans are among expert suggestions
http://www.abajournal.com/mobile/article/how_to_improve_law_school_required_clinical_training_capped_loans_are_among/
By Debra Cassens Weiss
Jul 24, 2013, 05:45 am CDT
Law schools that once promised grads a place among the elite need to change along with the legal profession, according to several experts who offered their suggestions.

The New Republic queried the experts as a follow-up to an article that, in its words, “chronicles the looming economic collapse of the legal profession.” ABAJournal.com reported on the highlights or the prior article here. The experts’ suggestions are here.

Among the suggestions gathered by the New Republic:

• From Harvard law professor Alan Dershowitz: Law schools should offer two years of academic instruction and a third year focused on the student’s career choice that could include internships and clinical training. The third year change might result in the need for fewer teachers and reduced costs. “There are no free lunches when it comes to legal education,” he write, “but cost-cutting is essential as law-school tuition has ballooned dramatically over the past half century.”

• From University of Colorado law professor Paul Campos, who formerly blogged at Inside the Law School Scam: Cap student loans. “The cost of law school needs to be reduced to what it was a generation ago,” he writes. “This would happen practically overnight if the federal government put reasonable caps on educational loans.”

• Slate legal correspondent Dahlia Lithwick: Add a hands-on clinical component to legal education, and put it during the first year. “The hope is that a year of practicing taking depositions, doing document review, and interviewing cranky clients might have helped clarify for many of us, early and often, that we won’t all get to be Clarence Darrow,” she says.

Reminder to Law Graduates: Student Loans Are Not Dischargeable

Early last year I posted about recent law graduates who filed bankruptcy due to student loans: 
‘Breaking News (02/03/2012): Law grads go to Court for Bankruptcy Protection’
https://lifesmockery.wordpress.com/2012/02/03/breaking-news-02032012-law-grads-go-to-court-for-bankruptcy-protection/

This is to remind law graduates and those who plan to attend law school and estimate that if their law career doesn’t hold muster that they can seek relief from the U.S. Bankruptcy Court. This is not the case, you do not have the protection of the law on your side, it is all for big business and corporate greed. As other bloggers continue to emphasize: student loans are non-dischargable debt.

The following TIME magazine article, also from last year explains the same: Why Can’t You Discharge Student Loans in Bankruptcy, TIME Magazine, February 09, 2012:
http://business.time.com/2012/02/09/why-cant-you-discharge-student-loans-in-bankruptcy/

Georgetown Law Graduate Discusses Law School: Is it Worth It?

Freedom from the Sunk Cost Fallacy: Say No to Law School
http://drewfrederick.wordpress.com/2013/07/09/freedom-from-the-sunk-cost-fallacy-say-no-to-law-school/
July 2013

During my fourth semester of law school, having already put in two years’ patent law work at a prestigious law firm, I realized that I didn’t want to be a lawyer.  All my friends told me to stick it out and finish the final year since I’d already invested two years of my life, and a lot of money, into law school.

Then I discovered the sunk cost fallacy: the mistake of incorporating past losses into current decisions.  For example, consider two men who have concert tickets to a favorite band playing at an outdoor venue; the first man received his free as a promotion while the second man paid $50.  On the evening of the concert, the weather is terrible and neither man wants to go.  The first man rationalizes that his ticket was free anyway, so doesn’t go, while the second forces himself to go, lest he lose $50.

But, of course, the ideal rational decision should be the same.  In both cases, at the time of decision, the men simply possess tickets to a show.  Assuming their preferences are the same, it is irrelevant how they came by those tickets – therefore, neither should go.  The second man has been duped by the sunk cost fallacy, believing that the cost already sunk in his ticket is relevant to a later decision.  It isn’t.

In deciding whether to finish my final year of law school, the only relevant question was whether it was worth the additional year and expense to receive my law degree; it was irrelevant whether I’d already spent two days, two years, or two decades pursuing the degree.  I finally decided that it was, considering that a law degree can be used to open a wide variety of doors (not just doors to law firms), but if I’d been in the same position after only my first year, with another two more years to go, my decision would have been to walk – nay, run.

Now that graduate degrees are what undergraduate degrees were twenty years ago, Generation Y seems to feel professionally incomplete without a master’s degree, law degree, or MBA.  U.S. law schools are graduating more future lawyers than ever before, and it’s a booming business for University, Inc.  Unfortunately, job opportunities and income are simply not keeping pace with the supply of graduate degrees, and Millennials now complain of debt, particularly student debt, as their “biggest financial concern.”  So it’s worth asking the question: Is law school worth it?  Let’s look.

Tuition.  At Georgetown University Law Center, my alma mater, annual tuition for 2012-13 was $48,835.00.  Just tuition.  To give you an idea of how much that is, here is a picture of several stacks of $100 bills, totaling $40,000.  Stare at this picture for a moment.  Then repeat to yourself: All this money is NOT ENOUGH for a SINGLE SEMESTER of law school tuition.
Living expenses.  Depends on where you go to law school, of course, but D.C. is not a cheap place to live.  My poorest law school friends squeaked by on another $20,000 a year, but most people racked up $30,000+ a year in rent, utilities, insurance, transportation, books, fees, and entertainment.
Opportunity cost.  Few Americans have enough savings for six months’ worth of unemployment; can you imagine three years of unemployment?  Some students were lucky enough to get summer associate positions at law firms but they were few and far between.  Most students settled for a modestly paid or even unpaid summer internship.  To calculate opportunity cost, figure out how much you could have made in the same period and subtract what you actually did make.  For most law students, the opportunity cost is well over $30,000 a year.
Interest.  Money ain’t cheap.  Most students will pay interest on their entire law school debts for many years after graduation.
Let’s assume a net expense of $70,000 per year for three years, plus an annual opportunity cost of $30,000, and amortize that over ten years at 6% per year.  That comes to a monthly cost of $3,330, or about $40,000 per year – for the next ten years.  But remember: that $40K premium is paid with after-tax dollars.  (Yes, there is a student loan interest deduction, but it’s limited to $2500, a tiny fraction of the interest paid, and it doesn’t apply to single people whose adjusted gross income is over $75,000.)  At a 30% marginal tax rate, representing federal and state income taxes, this $40K premium actually represents $57,000 of one’s nominal income.

In other words, if you go to law school under the above assumptions, then you’ll be paying $57,000 a year for the next decade just to break even, so your new job as a lawyer better account for that.  But what happens if you discover you don’t like practicing law?  Or what if your law degree doesn’t add $57K to your salary?  The major D.C. law firms, for example, are starting new lawyers at between $100K and $140K, but these positions are highly competitive and a relatively small proportion of law school graduates, even from the highest ranked schools, can get these coveted positions.

According to Above the Law, the median starting salary for law firms in 2012 was just $85K, and for those not lucky enough to land a law firm job, the median starting salary was only $60K.  Then again, over 15% of 2011 graduates had a median starting salary of $0, since they couldn’t find a job at all.

So let’s say you give up your $50K/year job to go to law school and get an $85K/year law firm job.  Not only will your real income shrink by $22,000 a year ($57,000 in annual debt payments makes a big dent in your increased salary) but you’ll actually be working significantly longer hours just to make that higher salary.  That’s right.  To succeed in one of those high-paying law firms, expect to bill 45+ hours a week, which means actually being present for 60-70 hours a week to deal with meetings, non-billables, and other administrative and corporate bullshit.  Believe me, I’ve been there.  And, of course, you can’t leave – you’ve already incurred the law school debt and need the job to pay it off.

Conclusion?

Option A: Quit your job, go to law school, incur enormous amounts of debt, compete for the coveted law firm position that will pay you, after your student loan payments, less than you made before, where you will work 50% to 75% more hours, and that you cannot leave for ten or more years because of your law school debt.
Option B: Be happy with your current job and avoid law school like the plague.

College: Is is Worth It? A Recap of Katie Couric Show

A week or so ago, Katie Couric had a show entitled: “College Is it Worth It.” She had a panel discussion with 3 people: The young actress from Fresh Prince of Bel Air, a Columbia professor (black) and one white guy who said college wasn’t worth it.katie

I found this episode interesting on many fronts because–I usually do not watch her show and the people likely to promote education were Black. I find it sad that Blacks remain deluded into thinking that college provides upward mobility in this post 9/11, current global, automated grind we call a world economy. I sympathized with Tatyana? Ali’s view as she graduate from Harvard and people would take her seriously. Worthy that her’s was an exception after having relative success at a young age in the theatrical arts she could actually afford and would know about an IVY league school.

It has always been the history of corporate America that a white male can work his way up the corporate ladder by starting in the mailroom and making connections. If you are a person of color, you are expected to not only be in the mailroom but to stay there. So I was not surprised to hear his viewpoint. The guy actually was a recipient of some fellowship that will pay high school graduates $100,000 to NOT GO to college/university in order to promote innovation. Now that’s an opportunity most of us wish existed when we were making our decisions whether to attend university.

Later, she had Tina Fey and Paul Rudd promoting their movie in which the former plays an admissions counselor in college. Katie Couric asked Tina Fey what advice she would give those considering college. Her response, geez I don’t know, I graduated from UVA, where the price was more reasonable. I was able to live off of $600 a month and take improv class. She said the college experience helps develop you as a young person. Then she looked so befuddled at the current state of affairs and just said I don’t know I guess you guys have to pay back the student loans.

Lastly, the show asked recent undergraduate students to tweet their college debts. Mind you these people haven’t even began to matriculate in graduate or professional level university. I saw three tweets at a glance–they were all female and each one had over $100,000 in student loan debt. Mind you women in America still make only 70% of what their equally qualified and/or educated counterpart makes. This also does not include women of color who, I read months ago in Trans-global report about economic and job progress stated that Black women who earn higher education degrees (university and/or graduate level) still have a harder time gaining employment than black male counterparts. Presumably the latter can find work in construction or labor jobs which do not require college degrees.

College, is it worth it? With all of this information regarding worthless degrees, shrinking economy, interdependent global economy forcing nations to bail out other nations because of a pact while ignoring the tens of thousands of unemployed and underemployed people in their own borders, I think the answer is quite obvious.

Woa Tells Us How You Really Feel: Forbes-Why Attending Law School Is The Worst Career Decision You’ll Ever Make

Why Attending Law School Is The Worst Career Decision You’ll Ever Make; Forbes Magazine, 06/26/2012

Not my words, words of Forbes magazine contributor. Wow, the magazine that is all about investing, making money, describing the wealthiest people around the world telling you law school is a bad investment. May we say told you so? This is major. We already witnessed The New York Times and the Wall Street Journal joining in the protest of ‘say no to law school,’ but Forbes. I must say this is great!

The news for would-be attorneys keeps getting worse. According to analysis from the Wall Street Journal released yesterday, only 55% of class of 2011 law school grads were employed full-time as lawyers nine months after graduation. The other 45% may be unemployed, working at Starbucks or starting their own law school hate blogs. LOVE IT.

The message that law school is no longer a sure bet when it comes to employment security and financial prosperity finally seems to be sinking in for potential students. In the last two years, the number of law school applicants has dropped by almost a quarter and the number of LSAT tests administered by the Law School Admissions Council has declined by 16%. How long we’ve been writing about this? False assurance of upward mobility, excessive debt, financial indentured servant status…This is so redundant, yet so true

Some law schools may be reducing admissions but…

That’s not stopping new law schools from forming? What, say it isn’t so. As long as you 0L keep falling for it, they’ll keep building. “If you make it they will come.” We see how much the ABA is looking out for the legal indu$try…

Here’s the article UMass Law School Gets Provisional Accreditation from ABA:The Wall Street Journal, 06/13/2012

Some law schools are endeavoring to produce fewer graduates or to “reboot” legal education, but for others, the accreditation process keeps moving along.

Massachusetts’ first public law school, the University of Massachusetts School of Law in Dartmouth, has received provisional accreditation from the American Bar Association, the Boston Globe reported.

Two words to describe this industry “cha-ching.”

The school will get full accreditation after meeting ABA standards for the next three years. Meanwhile, its students will be able to take the bar exam in any state. Previously, they could only do so in Massachusetts or Connecticut.

The provisional accreditation is expected to bring increased applications to the school, which now has 325 students, the Globe noted.

“ABA accreditation is the gold seal of approval for law schools,” retiring UMass Dartmouth Chancellor Jean MacCormack said, the Herald News reported.

The school was created in 2010 at the location of the former Southern New England School of Law.

As WSJ reported, the ABA accredited 10 new law schools since 2006, and the number of law graduates increased to 44,495 this year from 42,673 in that time. The number of applicants to law school has been falling recently — 14% this year from last.

Law Blog noted recently that the ABA granted a five-year extension to Tennessee’s Lincoln Memorial University to get accreditation, after denying preliminary approval last year. The extension allows students to sit for the bar exam in Tennessee.

10 Things Law Schools Won’t Tell You: We reveal why the Juris Doctor isn’t what it used to be.

An article by SmartMoney magazine.  If you believe the following, in particular in reference to a law degree, you’re highly misguided and simply not listening to the CLEAR warnings being issued by the law school scam blogs and now the mainstream media:

“I thought if I got a higher degree, I’d have a better chance to get a job, but that’s not what happened.”

Ha. My favorite part is the caveat emptor, nonchalant ‘you’re stupid enough to believe what we say attitude from one administrator of the Thomas Cooley School of Law. Leave it to an attorney to justify its clients’ deceptive practices and possible violations of civil law. Yes, this is what you deal with in the real world, your supposed bosses, colleagues and mentors will eat you alive as long as they get paid to do it. “…. James Thelen, general counsel at Thomas M. Cooley Law School, says the institution follows the American Bar Association and NALP’s rules when reporting job placement rates, and its web site lists the sectors its graduates have been hired to work in. Separately, he says, colleges can’t predict how an economic downturn will impact job openings. “No reasonable person could look at the accurate data we report about graduate employment today and believe that it is a guarantee that the very same percentage of job opportunities will be available when he or she graduates,” says Thelen.” You hear that? you are being referred to as irrational, lacking sense or the ability to deduce that you will be gainfully employed or employed at all by believing what law school’s official represent in their statistics. Classic.

From the Wall Street Journal to the New York Times and now SmartMoney (this media outlet is designed to inform consumers about financial planning and investments–hint, hint) So if you haven’t received the hint that you should not go to law school, then go ahead, don’t say we didn’t warn you. This is self-explanatory, the rest of the story is here:  10 Things Law Schools Won’t Tell You ; SmartMoney, June 6, 2012.

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