Wednesday, April 23, 2008

A Lawyer's Life: Crushing Debt and Miserable Jobs?

A couple days ago, the ABA Journal had a post on why law associates leave is clear, but why do they stay?

Associates are leaving in ever-increasing numbers because of grueling hours, boring work and a poisonous law firm culture, experts say. But it isn't as clear what can be done to lure many to stay on after their first four to five years in practice.

In 2000, not quite 60 percent of associates surveyed by NALP left their firms within about five years. By 2005, the Hildebrandt International Inc. legal consulting firm found that associate attrition in the first five years had risen to nearly 80 percent, according to the Maryland Daily Record, a legal and business publication.

"Every time an associate leaves, it can cost a firm up to $350,000 to hire and train someone new," the Daily Record wrote.

However, there's no consensus about exactly what law firms need to do to stop the associate outflow.
Hmm... you could always try raising the pay, but that doesn't seem to do the trick. Starting salaries have been consistently rising over the last few years as attrition rates get worse. Firms might want to try reducing the insane number of hours worked so their associates can actually have a life. It's no wonder 1 in 4 lawyers wants to quit.

As to why associates stay, crushing debt seems to be the answer:

We received 3,846 responses to this month's ATL / Lateral Link survey on your student loans, mortgages, and credit card debt, and one thing's pretty clear: an awful lot of you owe an awful lot of money.

Roughly 40% of respondents owed at least $100,000 in outstanding student loans. Broken down by class, here's what your student loan debt looks like:


What's particularly sad about these numbers is how deeply many of these law students are financially handicapping themselves -- possibly for life. These high levels of debt actually understate the true cost of law school as it typically also entails three years of lost earnings. Not to mention that the high-paying legal jobs are not guaranteed and can be hard to come by -- particularly if you're not coming out of a top 14 law school. And the legal job market may be getting worse.

Taking a look at George Mason statistics, average starting salaries are currently $83,871 with 12% of our graduates go on to big law firms. That means the average starting salary at GMU for those outside that 12% is $73,490. While these salary levels are much higher than typical starting salaries with an undergraduate degree, it can take an awfully long time to pay off those levels of student loans and make-up for three years of foregone salary.

In the book The Million Next Door, the authors profiled two brothers -- one a lawyer and one a public school teacher -- both in their mid-to-late 40s. The brother who was a teacher began contributing to his retirement plan as soon as he began working, lived in a modest home, had summers off, worked reasonable hours, and time to volunteer in his church and community. In contrast, the brother who was a lawyer spent three extra years in school -- incurring debt and forgoing income for those three years, lived in a larger home with a higher mortgage, drove fancier cars, worked in an environment where it was expected for him to dress in high quality clothing, and worked ~ 60 hours per week all year. The income of the lawyer was much higher than that of the teacher, but they both had about the same net worth. Granted this example is anecdotal, but is also instructive. Be very careful with the financial decisions you make.

Bottom line: If you want to be a happy lawyer, go to UVA. Otherwise, unless you get into a top 14 school, think long and hard about your reasons for going and your finances before entering law school. If you're still bound and determined to go, consider going to a lower-ranked, regional school. You will not only increase your chances to be at the top of your class (giving you much better career prospects than if you get lower grades at a higher-ranked, non-top tier school), but you might also get a full-tuition or half-tuition waiver, increasing your financial freedom and career options tremendously.

See my related posts:

1 comment:

Yeoman said...

I wish I just hadn't gone at all. Now I've been doing this for 20 years, can't find a way out, and find it the most miserable job imaginable. If you have to be a lawyer, don't be a litigator.