<p>There's an interesting article in The New Republic that takes a look at articles from earlier recessions where highly educated people were having trouble finding the type of work they thought they should be doing.</p>
<p>Near thirty years later, it turns out that their prospects were not always as dismal as they had feared:</p>
<p>Bad</a> Job Market: Why Media Is Wrong About Value Of College Degree | The New Republic</p>
<p>Very interesting, Greybeard. For what it’s worth, I’m suddenly starting to see a few signs of life in the legal market again. Last week I was contacted by one of my lawyers who is looking for experienced people in our industry for another client. I also heard from two headhunters for jobs in other states. One of my associates just found a great job after being laid off six months’ ago. </p>
<p>I don’t know whether this activity is unique to our industry. Things are still dismal for my kid’s law school class, but these could be the glimmerings of the beginning of a turnaround. </p>
<p>I’ve notice “help wanted” signs in all the local stores too, for the first time in a year or two. I’m trying to remember whether the markets traditionally go up in election years…</p>
<p>Well, we’ll see what happens to the hoards of recent JD grads with six-figure education debt who are facing fierce competition for $30/hour doc review jobs. I don’t think that’s a group that really existed 20 or 30 years ago.</p>
<p>I first met someone with six-figure education debt in 1989 (an MD). My own debt was much more modest - my monthly debt service was exactly what I paid for my first new-car loan.</p>
<p>But my first job out of law school in 1984 initially paid $8 per hour, the equivalent of $16.57 in 2010.</p>
<p>It wasn’t a document review job - I worked for a small litigation firm. It wasn’t even full-time at first. But the time I left a couple of years, I was making a little over $37 an hour (in today’s money), and had learned enough to start my own firm. Fast forward to the present - I’m a senior in-house attorney for a Fortune 1000 company.</p>
<p>It wasn’t fun graduating during a recession. And I remember well how depressing it was to be making so little money. It was a modest start, but it turned out to be the start to a rewarding career, both in terms of job satisfaction and remuneration.</p>
<p>I think the small firm route is actually a better one for most new law school graduates than the document review route, in terms of career development.</p>
<p>This motivated me to find an inflation calculator on-line. My first salary at a small specialized firm in the 70s was $15,000, increased to $18,000 upon admission to the bar. According to one inflation calculator, in 2010 dollars that’s equivalent to $49,500 that increased to $59,000. One quarter of my salary went to student loans, one quarter went to rent, one quarter went to other bill payments and one quarter (about $50 a week, if I remember correctly) went to everything else. Eventually I moved in-house & up the chain, and have worked on some pretty exciting projects. Let’s just say that I’m satisfied with my current compensation.</p>
<p>Until I used the inflation calculator, I wasn’t thinking about the context for new grad’s salary expectations. I think it’s amazing that my kid acknowledges that his starting pay (assuming he’s lucky enough to find a job) might be in that same $50K to $60K starting range. With this perspective, my experience makes me slightly more optimistic for his future.</p>
<p>“I’m suddenly starting to see a few signs of life in the legal market again.”</p>
<p>Same here. An alum just contacted me saying that her big firm is looking for six laterals in a variety of fields/levels. From fall 2008 onwards, I went about 18 months without getting a single email along those lines.</p>
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<p>Compare with the change in the cost of law school over the same period. The University of Pennsylvania maintains a historical [url=<a href=“http://www.archives.upenn.edu/histy/features/tuition/1980.html]archive[/url”>http://www.archives.upenn.edu/histy/features/tuition/1980.html]archive[/url</a>] of their tuition and other costs. </p>
<p>Law School 1984:
$ 9,815 tuition
$ 465 general fee
$ 525 books
$ 10,805 total</p>
<p>If we adjust for inflation using the same ratio that was used above, then we would expect a year of law school to cost $ 22,380 as of 2010.</p>
<p>But that’s not even close:</p>
<p>Law School 2010:
$ 45,430 tuition
$ 2,152 general fee
$ 1,000 technology fee
$ 48,582 total</p>
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<p>The article is interesting, but fails to address two noteworthy differences between then and now: </p>
<p>(1) today’s students tend to carry much higher levels of student loan debt, since college costs have risen much faster than inflation, and</p>
<p>(2) today’s students (unlike those of the past) completely lack the ability to discharge such debt through bankruptcy.</p>
<p>In the past, underemployed college grads had to start at the ground floor before the could work their way up.</p>
<p>But many of today’s underemployed college grads have it even worse – because of their debt, they are starting from deep in a hole.</p>
<p>My point in linking to the article was not to suggest that everything today is just like it was in 1982. I’m well aware that law school tuition has been going up faster than the rate of inflation for the last three decades. Tuition at Berkeley nearly doubled between my first year and third years of law school. (Given that it started in the three figures, that wasn’t exactly a tragedy.) It’s also true that salaries for Biglaw associates went up much faster than the rate of inflation for several years.</p>
<p>My point was that those who are graduating now but haven’t found their dream jobs shouldn’t despair. Things are likely to get better, even for those who borrowed heavily to fund their educations.</p>
<p>By the way, student loans have been generally nondischargeable in bankruptcy since 1976, only 18 years after the very first federally backed student loan was funded.</p>
<p>It has, and will continue to, boil down to three simple underlying problems:</p>
<ul>
<li><p>There are more lawyers in the US than there is demand for lawyers, with more being pumped out every year</p></li>
<li><p>New lawyers coming into the market frequently carry absurd quantities of debt that, as a result of the first point, often become difficult if not impossible to reasonably pay off given the average pay obtainable in an over-saturated legal market </p></li>
<li><p>Despite both the above being widely publicized for some time, and even the ABA recently coming right out and saying that many need to seriously question if law school makes sense, everyone think’s they’re the exception, the masses continue to plow forward anyway, and the market becomes yet even more saturated</p></li>
</ul>
<p>Finally, all the above is really rooted in fundamental problems with the US legal industry. The 2008 recession certainly didn’t help the situation, but it didn’t cause it.</p>
<p>I feel a lot better about attending law school than I did just a few months ago. The hiring freeze seems to have subsided a bit. Law firms still aren’t hiring the numbers they were during the hiring boom, but they are slowly building up. School name counts as much as ever though.</p>
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<p>These jobs are not necessarily easy to come by. And many of the small-firm jobs available are at slip-and-fall or insurance defense shops, which probably don’t open a lot of doors. Even non-paying positions are competitive at this point.</p>
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<p>I suppose that, if you can’t get any job at all, things would almost have to get better for you professionally. Unless you default on your loans, in which case you may end up with terrible credit and significant debt for much of your life.</p>
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<p>An additional problem with law is what I guess you could call “path dependence”: if you don’t start working at a big firm or prestigious government agency right out of school, you probably never will. And a lot of boutique firms, banks, hedge funds, etc. hire primarily from those firms and agencies, so those jobs may be closed off as well.</p>
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<p>Commercial student loans – i.e. loans not made by non-profit or govermental agencies – only became non-dischargeable in 2005. Such loans have been marketed aggressively since then, regardless of a student’s academic ability or course of study, because current law makes it nearly impossible for borrowers to default. </p>
<p>The parallels with subprime mortgage lending are disconcerting. Except that you can default on an unwise mortgage.</p>
<p>Point taken, although I don’t remember there being any commercial student loans available when I was in school.</p>
<p>The small firm I worked for did plaintiffs’ personal injury cases. It wasn’t glamorous, but it gave me practical experience in selling my services, marketing the firms I worked for, and plenty of opportunity to draft pleadings, memos of points and authorities for law and motion practice. I tried cases, conducted arbitrations, did discovery, and handled mediations. My colleagues who spent their time at big firms may have made more money initially, but I wouldn’t dream of trading my experiences for theirs. My time at small firms allowed me to get my foot in far enough to keep the doors I wanted to enter from closing, and gave me the chutzpah to push my way through.</p>
<p>As a headhunter, I can tell you the market for laterals has picked up significantly. I have more jobs to fill than I have time to fill them. I have a good mix of in house and firm jobs for the first time in quite some time. I am doing more cold calling than ever and have recruited my D, home for the summer, to help with that. I realize this doesn’t mean that all is well in the entry level market.</p>
<p>Yet another article, confirming the information provided to CC by practicing lawyers:</p>
<p>[Law</a> School Class of 2010 Starting Pay Fell 20% as Jobs Eroded, Study Finds - Bloomberg](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>
<p>The legal-career paradigm has shifted, and continues to shift. It’s easy to blame the recession, but multiple factors are at play including the economics of supply and demand (there are too many lawyers, causing competition to push fees down). It appears that the market is starting to pick up for experienced attorneys, but it is clear that all is not well for the masses of new lawyers.</p>
<p>I may be relocating (boo hoo) shortly. Life is about to get very complicated, and I don’t think that I’ll be able to continue to offer my thoughts on CC. I apologise to anyone I’ve offended, and wish you all well.</p>