Am I missing a something here??

Graduate School Law School
1

<p>Well I've heard a lot of complaining on the debt after Law School.</p>

<p>I did the "math", and I don't see what all the big fuss is about. . .</p>

<p>I mean, if you go to Harvard, for example, you'll end up with about $130K debt after law school.</p>

<p>You will get a job in NYC that pays $135K.</p>

<p>You will get a humble apartment. $1025.</p>

<p>You will have ur expenditures. . .$500</p>

<p>That's a total of $1525 dollars a month.</p>

<p>That's $18,300 a year.</p>

<p>If you subtract that from the $135K, you have $111700.</p>

<p>In what part of this analysis do you regard me as ignorant?</p>

2

<p>you'll probably pay more on rent/expenditures</p>

3

<p>One word: taxes. I don't know the exact tax rates, but if you take federal, state and city taxes away from a $135,000 salary, you could easily send 35-40k a year to Uncle Sam. Also, while you MAY be able to get an apartment in NY for $1025 (and even that's a stretch, except for possibly Harlem and Brooklyn), utilities, transportation, food and miscellaneous expenses will be far more than $500/month. You would probably also want to save a bit every month for emergencies/investment/unforseen expenses, etc.</p>

<p>But still, given all that, this is not an awful situation for the select few lawyers who graduated from a T-10 school and did well enough to land these jobs. If you lived frugally you may be able to pay 30k a year toward your debt. Of course, if you went to Harvard (or a private law school of equal quality), your debt is more likely to be 150k+ and it would take at at least 3-4 to pay this down with a corporate job.</p>

<p>Not all law school graduates will want to pursue (let alone be able to sustain) this type of work , since it may very well dominate 60-80 hours of their week, 50 weeks a year.</p>

<p>Just some thoughts. I'm sure others have more to say.</p>

4

<p>I'll weigh in. Frankly, I'm just not sure where to start.</p>

<ol>
<li><p>Harvard, Yale, and Stanford are three schools. About 1,000 students (tops) every year will go to those schools. 150,000 students will take the LSAT. So basing ANYTHING on Harvard is, IMO, ridiculous. If that's the way you think, you don't belong in law school. The advice given is to be applicable to more than 1% of the law students in the world.</p></li>
<li><p>Outside of Harvard, Yale, and Stanford, you are not guaranteed a job that pays $135,000/year. Look at the median salaries for students coming out of those schools. Many who are not in private practice may not have been able to get good private practice jobs. </p></li>
<li><p>Beyond HYS, you will not get funding for judicial clerkships. The top clerks (as in Supreme Court clerks) get paid about $53,000/year. If your debt is enormous, you won't be able to make loan payments on that salary. </p></li>
<li><p>Not everyone wants to sell their souls to big firms and work 90 hours a week. If you go to law school and rack up a measley $100,000 of debt, you'll be precluded from most public service jobs unless your school gives you loan repayment. Outside of HYS, that is limited; outside of the Top 25, it's very rare.</p></li>
<li><p>Your math needs work. First, loan values: Northwestern costs over $60k/year. Most urban universities are not far behind. "Cheap" private schools will run about $45,000/year. Public schools (do a search for my posts on this) will cost about $30,000-$40,000/year. Add in interest (roughly 60% of the value of the loan). So you're up to, for the expensive schools, $250,000 of debt to be repaid - i.e. $25,000/year. </p></li>
<li><p>You clearly have NEVER paid your own bills on your own. Taxes will take out more than half of that $135,000. I disagree with Karla's estimation of taxes as 1/3 of salary. First off, NYC taxes are obscene; second, I paid about 1/3 of my salary (31%) in taxes when I worked as an engineer for much less money. So you're left with about $65,000. (NYC taxes are amazingly high.) From that, take out your loan payments per above. Now you're down to $40,000 on which to live. Congrats - you're working 90 hours a week, have a quarter-million dollar education, and are living about as well as a school teacher. You went to Harvard. You got the great job. You're watching every penny; you're not saving for retirement.</p></li>
</ol>

<p>I could go through the painful AriesAthena "cost of living" math, but search my posts for it. It is enough to know that after taxes and loans, you're making what a teacher makes after taxes. You want the money? Spare yourself the misery of law school and go for a master's in education.</p>

<p>Throw a spouse into this. I know people who have about three quarters of a million in debt between husband and wife (two professional school tuitions + mortgage on a rowhouse for less than $200,000). That's a lousy way to start off your life.</p>

<ol>
<li><p>You're also not thinking a day beyond age 25. Want kids? Do you want to be paying off your tuition while trying to save for theirs? Want to buy a house? Good luck getting enough together for a down payment. Your credit score will also reflect your student loan debt, so get ready for higher interest payments. </p></li>
<li><p>Big firm burnout time is roughly three years. So what do you do after then? </p></li>
<li><p>Please note that you're probably better off, both in terms of quality of life and finances, being in a smaller city like Baltimore or Richmond. The salaries are about 10-20% lower, but the taxes are much lower and the cost of living is about half of NYC. You'll work hard, but you'll be able to see your friends and have a life. </p></li>
</ol>

<p>I don't mean to be completely snitty, but your post just does not mesh with reality and is more than a little arrogant. Until you have a Harvard acceptance letter in your hand and an offer from Cravath, consider what your options after law school will really be like.</p>

5

<p>Lol.</p>

<p>Thank you all for your posts; you've all let me see the reality.</p>

<p>My post was not meant to be arrogant, it was just ignorant, ignorance that, at my age, I cannot help.</p>

<p>My post probably was off by a lot of $'s, but my question is: is it that there is so much whining among law school grads because they are trying to live as if they were the Sr. Attorney at Craveth?</p>

<p>If we lived more humbly as law school grads for a couple of years, couldn't we get out of the hole faster?</p>

6

<p>My apologies. </p>

<p>Yes, but it's a rather deep hole, don't you think? Assuming, even, that you save up some money before law school, get an excellent 2L summer job, and earn some spending money during 3L year, you're still graduating over $150,000 in debt, which balloons to over $200,000 when you pay interest.</p>

<p>I think that some of the whining is that a lot of those people have never worked before. They are now working very, very hard, for not a lot of money per hour. Consider that a lawyer who works over 80 hours per week is effectively working two jobs. On a per-hour basis, after taxes, he makes less than an engineer. On an hourly basis, after taxes and loans, he's making what a receptionist would make. </p>

<p>Someone once said that people who graduate law school and don't like the law (and there are many of them) just don't like working. They may have gone straight through from undergrad, never worked, and are doubly miserable doing what they are doing. The salary isn't enough to compensate. </p>

<p>(The one thing is that, if you keep moving up and stay with the firm, you'll be paying off your loans pretty easily, esp. if your bonuses are nice.)</p>

7

<p>
[quote]
That's $18,300 a year.</p>

<p>If you subtract that from the $135K, you have $111700.

[/quote]
</p>

<p>Quote of the month.</p>

8

<p>
[quote]
You will get a humble apartment. $1025.

[/quote]
</p>

<p>Do tell, where does this place exist? You may find an apartment for $1025 but you may have reservations about wanting to live there. If you're lucky you may be able to get a share for $1025 (especially if you are looking to live in manhattan)</p>

<p>
[quote]
while you MAY be able to get an apartment in NY for $1025 (and even that's a stretch, except for possibly Harlem and Brooklyn),

[/quote]
</p>

<p>With all of the major building booms happening in these areas, you still won't get an apartment for $1025 as there are homes that are now topping $1 million in harlem and brooklyn.</p>

<p>Taxes: City federal and local taxes. add 7.5% for FICA, then add the cost of health insurance because even if your company offer's it, you still have to help pay for it. The concept of having a couple of $$ for retirement would be nice (so now there is a deduction for your 401k, Ira or whatever mechanism of saving for retirement that you choose) You'll need to dress the part of a person making this $135k and the list goes on.</p>

9

<p><--- Lives in NYC (Brooklyn as a matter of fact)..So I can testify to what is being said.</p>

<p>NYC Tax rates will NOT DOCK you 50% as AA has said. having said that, the tax is crazy. It will dock you about 3-4/10 of your paycheck. As for finding an apt for 1025 its possible, but hard. You sure won't be living in Midtown anywhere, but you can find a studio for about 800 in a good neighborhood in brooklyn where the commute isn't terrible. Even apts in Astoria (which is a 5-15 min trainride to Midtown Manhattan) you can find btwn 800-1000..</p>

<p>Having said that, loan interest as AA had said will get you good. You will pay back 130%-150% of the loan after interest when you are finally all said and done. And making partner take years to make (if you even make it at all). 150K in debt is a lot of debt for public sector law jobs</p>

<p>Having said that, I still think you are living decently while you pay it back</p>

10

<p>in considering the costs of living don't underestimate the following--
1) you're going to have to dress the part if you are working at a large firm -- nice suits cost a lot of money. so does dry cleaning them.
2) given your hours, don't expect much time for cooking home made meals -- expect to take in or eat out when you have time to eat at home -- costs a lot more than cooking for your self.
3) nothing in nyc is cheap.<br>
4) apts in the boroughs may be cheaper - but factor in the commuting time -- given how much time you'll be at work, how long do you really want it to take to get home when you are done?
5) don't forget the cost of utilities - you'll be surprised how much they can add to your monthly bills.</p>

<p>as others have pointed out, i think the op's numbers reflect a serious lack of understanding of what life in the big city costs (not to mention what taxes eat away from a paycheck). students often can manage to live very frugally - they generally have no choice. but after 4 years of college and another 3 of law school, the student lifestyle can start to wear a little thin. those debts take a long time to pay off.</p>

11

<p>I honestly think that the heart of the complaints of most recently graduate law students isn't really the debt, but job satisfaction.</p>

<p>yeah, the debt is tough and many complain, but the real challenge seems to be adapting from acadamia to the working week. </p>

<p>putting job satisfation aside just for the sake of this arguement, law school is a great investment for most. especially when you compare it to other graduate degrees.</p>

12

<p>I've lived the life of having full tuition student loans from law school while working as an associate in a big NYC law firm. </p>

<p>The loan payments on $150,000 of student loans (about the minimum you will have coming out of law school without a lot of help) are about $1400-1500/month, even after consolidation -- those are premium after-tax dollars there. </p>

<p>Consider, too, that your gross income as a first year associate will disqualify you from many tax breaks, including the ability to deduct interest on your student loans, and within a year or so of practicing (unless Congress finally acts to change things -- which they have completely failed to do for years now), you will find yourself within the dreaded Alternative Minimum Tax, or AMT. Your combined contribution to federal, state and NYC taxes, including FICA, will be approximately 40-42% of your salary. You will also have to contribute to your health care costs (though those are pre-tax dollars), including medical, dental and eye care. You will probably want to (and should!) start a 401k, which, will take as much of $15,000 of your hard earned pre-tax dollars (and lower your taxable income). Law firms do not match 401k plans like corporations often do, nor do they provide pension plans, so you would be wise to think about funding your own retirement right off the bat. </p>

<p>As far as costs of living in NYC, could you find a studio apartment in Astoria, Queens for $1000/month? Maybe. But when you're working 80-90+ hours per week, do you really want to be trekking home to Astoria every night? What I have consistently found in the years I have been practicing and living in NYC is that when you're working beyond the point of exhaustion (and you will ...), creature comforts reign supreme. You want to be able to get home quickly. When you have the rare opportunity, you don't want to be all the way in Astoria when your friends are getting together in SOHO. You will want to live in Manhattan, and you will find that the vast majority of your peers will be doing the same. If you want to live alone, a "nothing special" one bedroom apartment will cost you at least $2,000, but for that money, you likely won't be living too conveniently to the subway or in too nice a place. When you get up to the $2,300 - 2,400 range, you will start to see some availability of decent apartments. A roommate will reduce costs, but the apartment you get with a roomate will be more expensive to begin with since it will be bigger. You'll find, too, that having a doorman is all important, particularly if you are a woman, and especially when packages, dry cleaning and anything else needs to be dropped off or done for you. When you come home at 3 a.m. from work, it's also nice not to have to fumble for your keys at the front door as the car driver who brought you home and doesn't care to wait to see if you got in safely quickly drives away. Take my word on this.</p>

<p>Dry cleaning costs a fortune in the City. Add $40-50/week into your budget for this. Cable television, even without HBO (gasp!), costs about $85/month. Internet access? Another $35/month. Gas and electric? Often $100/month on a small apartment, though that varies a good deal -- hey, you may even save $10/month if you're never home! Cell phone? Plans vary - figure $40/month. Landline phone? Figure $25/month. Groceries, taxis, Starbucks, eating out, going out (beer, even at the local Irish pub, typically starts at $5-6/pint), haircuts (for women, in the neighborhood $75, at a fine salon $150), clothing, shampoo, toothpaste, etc. are all additional. Oh, and don't forget those tips to your super and doormen at Christmas time -- yeah, those will be $400 or more depending on your staff (the super alone usually gets $100-200).</p>

<p>Moreover, what you will find as a first year associate working at one of the firms paying a top salary is that you will do okay. You will have to live fairly frugally (no, you won't have a BMW, nor will you be going on shopping sprees at Barney's). You will be able to live without the lights getting shut off, though. You will have enough money in your checking account each month to pay your bills, and you will make enough money to max out your 401k. You will have to be smart about it. The good news is that you will be eating client-paid dinner in the office most weeknights, many of the biggest lawfirms have low-cost gyms for you to join and you will be going home late enough that you will get a client-paid car home most nights, too (okay, so these are good only in a cost saving way, not in a lifestyle way). The reality is that someone with average sized student loans from law school won't be able to afford NOT to work at a big law firm. Working at a big law firm will allow you to get by -- and you will get raises each year that will make things easier and easier for you. If you budget right, you should also be able to pay off your student loans using bonuses and savings by about your sixth year of working.</p>

13

<p>
[quote]
I honestly think that the heart of the complaints of most recently graduate law students isn't really the debt, but job satisfaction.

[/quote]
</p>

<p>ah!!! but the two are related!! as others have posted, if it is this difficult to live comfortably with all that debt on a the salary you make at a big firm, imagine how much harder it is if you work at a job that pays less? it can become easy to feel trapped into a big firm job where the hours are excessive and job satisfaction may be low when you are carrying that kind of debt.</p>

<p>so before someone takes on that kinid of debt they REALLY need to think about what type of lifestyle they want to have after law school -- and weigh very carefully how the money factors will influence their freedom to choose their jobs.</p>

14

<p>Working at a big law firm is a pressure-filled adventure best likened to running through a political minefield. Sound onerous? It certainly can be. You can also find excellent experience and training there that will almost certainly be a better resume builder for any lawyer than the law school or college that you attended. Even for the attorneys working there who enjoy the work and find it interesting and challenging (as I did), there are times when most of the attorneys there (including me) wished they were somewhere else.</p>

<p>I say this because what unbelieveablem says is absolutely true. If you come out of even a T14 law school, where you theoretically have every opportunity available to you, you will undoubtedly be limited by the amount of debt you carry. Only the salaries offered by the biggest law firms in the biggest cities are likely to be able to support you and allow you to make your debt payments. As I mentioned earlier, with some planning, a lot of frugality and a little bit of luck (good years with good bonuses), you can pay off your student loans within 6 years or so. So what happens then?</p>

<p>Even those students who come out of law school debt free may find themselves bound by the merciless "golden handcuffs" of the big firms. The salaries at the big firms are so much higher than the salaries elsewhere that even without student loans, you will have to take a huge step backwards in terms of what you can afford/lifestyle in order to leave. Do you want to buy that big house in the suburbs? That nice new car? Take that vacation to Majorca or safari in Africa? Golden handcuffs, baby. Yes, you may be able to find a mid-sized law firm in a big city that pays only 10-20% less, though you will often be working almost as many hours to be employed there. Many of my corporate-law type friends and some of my litigation oriented friends have chosen to become in house counsel after working in big firms for 5-6 years, and have taken 50-60% paycuts to do so (You will still make six figures -- though on the low end). You often do find substantially better hours in house -- maybe 50-60 hours/week. Rarely will you find any job in law outside of the government (and often not there) where you will work 40 hours/week. Many other litigation types go to work in the government after practicing for six or seven years. Keep in mind that most of the big firms hire large groups of law school graduates to fill their first year classes -- I believe that statistically about half will be gone by their third year -- so making it to the sixth year to pay off those loans will be quite an accomplishment.</p>

<p>So why are so many lawyers happy and excited about their work? Well, that's just it -- the work is exciting. There is always a new challenge, and you will never be bored. You need to understand the psychology of your clients and your opponents/team of lawyers and business people on the other side. There is always something new to learn -- a changed law, a new industry, a different approach. You get to be creative in coming up with and offering solutions to your clients real world problems. You get to be a part of something growing and dynamic with your clients. Perhaps the best feeling of all is when you close that deal/win that trial or motion. </p>

<p>It is worth it? Only you can decide, but you really have to know yourself to make that choice. Ultimately, if you go to law school, practice for a few years and decide that practicing law is not for you, the law degree will open up a lot of doors for you (though lawyers are often perceived as stiff and too conservative, so make sure to learn to be flexible and see your clients' forests through the trees while you are practicing). The only potential problem are those pesky student loans -- so perhaps you work long enough to pay them off. As I've said many times before, go in with your eyes open.</p>

15

<p>Thanks to everyone who has posted on this thread. It's given me a more accurate picture of what to expect after law school.</p>

16

<p>Yep. You've all shown me how life after law school's gonna be. Thanks you guys!</p>

17

<p>How do I figure the percentage of my money going to taxes?</p>

18

<p>that's pretty complex when you figure in certain deductions, sales, and property taxes.</p>

<p>income tax is more simple. just look at a tax scedule.</p>

19

<p>Taxes:</p>

<p>As I posted earlier, my total tax bill, living in Massachusetts, and earning a nice salary, but substantially less than $135,000/year, was 31%. That's federal, state, FICA, Medicare, etc. NYC's rates are higher, and federal increases with increased salary. I stand by my 50% estimate.</p>

<p>I agree that you need to dress the part of someone making $135,000/year. Your clients are NOT going to pay you $325/hour* to see you in worn khakis. Good suits are at least $300 each. </p>

<p>A while back, the New Yorker ran a piece about working hours and the economy. When people work longer hours, the economy (especially for the working class) improves. The long-hour people don't have the time to do their errands, food shopping, cooking, etc., so they hire people to do it. You'll spend a lot of money paying people to keep your life running for you.</p>

<p>Now, calculating tax on $135,000 (I rounded):
federal: $14,600 + 28% of everything over $72,000 = $14,600 + $17,600 = $33,200
FICA = 6.2% up to $94,200 = $5,800
and 1.45% on all wages = $2,000
State: $6,400 + 7.5% of everything over $100,000 = $6,400 + $2,600 = $9,000
<a href="http://www.tax.state.ny.us/pdf/2005/inc/it150_201i_2005_54.pdf%5B/url%5D"&gt;http://www.tax.state.ny.us/pdf/2005/inc/it150_201i_2005_54.pdf&lt;/a>
City: $3,500 + 4.05% over $100,000 = $3,500 + $1,400 = $4,900
<a href="http://www.tax.state.ny.us/pdf/2005/inc/it150_201i_2005_64.pdf%5B/url%5D"&gt;http://www.tax.state.ny.us/pdf/2005/inc/it150_201i_2005_64.pdf&lt;/a&gt;&lt;/p>

<p>Our total: $54,900. I may have missed one or two, but how 'bout them apples?</p>

<p>Note that there's a sales tax of 8.375% on items in NYC. </p>

<p>*If you work 80 hours a week, 50 hours a year, you're making in the realm of $35/hour. I made $25/hour straight out of college. Overhead costs, though, really cause that to be marked up, and you're only going to bill about 2/3 of your time.</p>

20

<p>Honestly, I've lived pretty frugally my whole life, so I think I could easily handle such a living for a few years after law school. If you come from a family with money it may be harder. IMO, since I am not used to too much luxury, those numbers produced by sallyawp sound ok to me. The only difference (A BIG ONE), is that I am not working 80-90 hours to live the way I currently do.</p>

<p>Thanks for the numbers you lawyers (sally, AA...), it honestly puts a good idea of what one will be getting themselves into by becoming a lawyer. </p>

<p>And I thought it was all going to be the way John Grisham said it would be ;)</p>