A Hollow Victory

As you can see from the pic posted here, I have fully repaid one of my student loans.  This particular loan came directly from my school, which is why I cut out references to my alma mater's name.  That leaves me with one other loan that I am currently repaying, and then I am done.  I have about one more year, give or take, of Spartan living before I am debt-free, and I can close the dark chapter of my life known as Law School.  When I received this payoff notice, at first I felt a sense of pride and hope.  Soon I would actually be able to save some of the money I earn and build wealth for my future.

But after I read and re-read the second sentence, pride and hope were replaced with frustration and sadness.  Because I repaid my loan, some other poor schmuck now has the ability to take out crippling student loan debt.  And my school's low default rate remains intact, resulting in further federal student loan funding.


I suppose some might believe that since I repaid my loan, as so many fellow alumni of my school have, then I must have benefited from higher education.  After all, how could I earn enough to repay my loan in under five years if my employment prospects had not brightened as a result of my degrees?

Having the benefit of hindsight, I can honestly say now that I did benefit somewhat from my earning my bachelor's degree.  The positions I've held since graduating have all required a four-year degree (save for some moonlighting jobs I have taken in order to repay my loans at a faster rate), and almost everyone has one nowadays, so it's hard to compete in the marketplace without one.  BUT.  I should not have taken out student loan debt to earn it.  Although I worked almost full-time during my undergraduate years, I realize now that I could have cash-flowed my BA had I worked and saved for a couple more years before enrolling.  It might have taken me longer to get through my program, but probably not as many more months or years as it has taken me to pay off half of my loans.  And, I would not have had to pay interest.

As far as my law degree is concerned, I can honestly say now that I did not benefit from earning my JD.  The positions I've held since graduating (aside from any associate/law school intern positions) have been obtained by omitting or downplaying my law degree on resumes and applications.  I do not list my JD on my resume (a resume is, after all, just a marketing tool), and when I fill out applications, I only list my JD if I am asked to list all of my higher education degrees.  The fact of the matter is simply that employers do not want to employ lawyers or JD's in non-lawyer positions.  Unless that lawyer or JD is going to run a fortune 500 company or teach law.  Last time I checked, I think all of those positions have been filled.

I am not sure what else to say about law school to those considering it, except: Don't go.  Please.  You will absolutely regret it.  I do not know any happy lawyers, or any recent graduates who are happy that they decided to attend.  I cannot put it any simpler.  It will leave you in a financial hole that will take years, if not decades, to crawl out of.  And the legal market is saturated.  What else can be said?

I hope this post will give some of my fellow JD's and recovering lawyers some hope for their financial futures.  I am not debt-free yet, but I know I will be soon.  At that point, I will be able to say that law school took [X number of] years from me, rather than my entire life.

The Flawed Law School Model

I have referenced the law school "scam" and the failed/flawed law school model many times, but now I think I should discuss in further detail what exactly I mean when I reference these.  Here are my thoughts (in no pariclar order of importance). 

Law school does not prepare students to be small business owners.

At orientation, there were many speakers who described the rigors of a legal education, the stress that comes with applying to the Bar, the "many doors" that JD's open, all peppered with jokes about the fancy cars that most lawyers drive. What none of these speakers mentioned is that most attorneys, especially in the current job market, are basically on their own. They did not tell me that career services would not help those students who were ranked below the top 33% of their classes, and would instead tell them they would need to hang out their own shingles. (True story: an unfortunate classmate of mine had a 3.0 GPA, and was ranked just in the middle of the class. She was paying out-of-state tuition, and had racked up $160,000 in loans, when she went to career services for help in finding a job. She was told to hang out her own shingle, even though she had no business training and the law school did not offer a course in operating one's own practice.) I was lucky enough to find a decent-paying job upon graduation, but if I had not, I would have been in the same boat as many of my classmates, forced to run a small business with no training and no idea how to even practice law.

If you are considering law school, I implore you to first ask yourself whether you know how to run a business, and if so, do you think you can run that business successfully when you do not even know if you are competent to offer your services?

Which brings me to my next point.

Law school does not prepare students for the actual practice of law.

I completed an internship during the summer after my 2L year at the DA's office. This provided me with courtroom experience, but most of my fellow students were not as fortunate. Most law students take classes that involve listening to lectures, reading case law and statutes, and maybe conducting an exercise or two in oral argument. None of which matter when you are faced with an actual client sitting across your desk.

Even with my valuable experience of representing the State in the courtroom for a few weeks, I still had no idea how to conduct a client meeting, or how to structure a fee agreement. Or even how to go about suing someone in the state in which I practiced. All of that knowledge came later, after I had the opportunity to work with more experienced attorneys who showed me the ropes and who made me calendar deadlines properly.

This is a critical failure of the current law school model. No one knows what they're doing upon graduation. New graduates are in need of mentors, but oftentimes they end up on their own, and they end up failing or quitting or moving back in with their parents because they cannot develop enough business to support themselves.

Here is a valuable law school exercise that I will provide you at no charge: go to the Supreme Court's website and read through some of the opinions. Then go to your state legislature's website, or your city/municipality's website and read a chapter of statutes or ordinances. Pick out a topic that interests you like criminal law, or insurance regulation. Once you have finished reading your cases and statutes/ordinances, ask yourself what you would tell a client who was arrested, or who felt he had been defrauded by his insurance company. How would you tell him to proceed? What would you tell him you could do for him? How much would you charge him? What timeline would you provide for resolving his case? Do you think he will prevail?

If you feel that after reading the materials I assigned you, you could confidently answer these questions, then law school is for you. There are two reasons I say this: you are either a) a genius who will be picked up by one of the big firms and you will not have to worry about figuring things out yourself, or b) so delusional that you probably do not have the mental faculties required to complete a JD, so you will never have to worry about practicing on your own.

The study of law is nothing like actual law practice.

This flows from my previous point that law school does not prepare one for the practice of law. In law school, students partake in the Socratic method. You read a bunch of materials and the professor drills you on them, questions everything you say. You must defend your position on a topic that is almost always interesting and has vast political implications. At the end of the semester, the professor will read your essay exam and provide you with a grade that reflects how well he or she believes you have retained the lessons imparted during the past few months.

In reality, when you practice law, most of the time you will be sitting alone in a room, keeping track of billable hours, and drafting mind-numbing research memos. One after the other. Westlaw and/or Lexis will become your best friends and worst enemies. Your research topics will most likely involve issues that no one cares about, save for the client. Can Janie sue her classmate for spilling soda at prom, which caused her to slip and fall and sprain her ankle? What is Fred's recourse when his insurance company offers him less than he had anticipated for the car that he totaled? Can Pam get a restraining order on her ex-boyfriend even though he has never hit her, but her parents think he is controlling? If Pam gets that restraining order, how will that affect her ex's child support obligations or custody arrangement?

Oh, and did I mention the best part? No one will read these memos. You see, your supervising attorney does not have time to read them because he or she tees off at 3:00 sharp. He or she would simply like to know the answer to the question, in 10 seconds or less, and will then direct you to file the memo away, just in case the client ever questions the bill. That memo will serve as proof that actual work was performed for the client. But no one will grade you on it. No one will tell you how awesome your case law synthesis turned out or want to speak with you further about the greater implications of the answers to these legal questions. No one cares, you see, because no one wants to actually practice law. They just want to make enough money to afford country club dues and to pawn off research assignments on young associates, who will then turn around and do the same in a few years when it's their turn.  And you will not be one of these lucky young associates because the legal job market is steadily shrinking and most small firms will not even consider anyone not in the top half of their class (which leaves a lot of graduates with their cheese out in the wind) and the big firms will only consider the top 10-20%, depending on school ranking. 

If you are considering law school, ask yourself if you could handle working in a field in which no one will ever give you positive feedback, whether it is a supervising attorney or a client. The supervising attorneys will only gripe if there are holes in your research, but will otherwise remain silent, and clients will only complain about your bill. If you manage a favorable outcome for them, it was because their cause was just. If you do not, it is because you were incompetent. Do you want this for yourself? Or, more appropriately, would you ever wish this on anyone?

Unless you have a scholarship or a rich relative paying your tuition, your income will almost never justify the amount spent earning your JD.

Consider that the average law school debt for public school graduates is a little over $68K and over $109K for private schools (for the 2009-2010 school year). Suppose you are able to spread out $68K over 30 years. Your payments, assuming a 6% interest rate, will be $408 per month. $109K spread out over 30 years will be $654 per month. Remember, this assumes 6% interest, and that you can spread the loans out over 30 years. So that's between $4,896 and $7,848 per year spent on student loan payments, not counting undergraduate degree payments. You can only deduct $2,500 per year on your federal income taxes, and only for the first five years after you begin repaying. Considering the average attorney salary has been steadily dropping (to about $63K currently), this means you will be spending somewhere around 10% of your income on student loan payments. Considering that the average salary for a college graduate is $46K, what exactly have you gained from earning a law degree? A few thousand dollars a year? Which will be eaten away by all of the extra hours spent working in a field that will eat away at your soul and make you want to auction off your JD.

Let’s do a little math here and figure out just how well you’ll be living with a JD and an annual salary of $63K.  Would you like to buy a house? Have a car? Health insurance? Contribute to your retirement? Ok, then, let’s go!

Assuming you are single, you will be in the 25% federal tax bracket. And we’ll assume state and local taxes are 5%, give or take. And your health insurance premiums are $300 per month. And that you contribute 2.5% of your salary to your 401(k). Here are your pre-tax deductions:

$5,250 is your gross monthly pay.

After deducting $300 for health insurance premiums and $131.25 for 401(k), you are left with $4,818.75. Now comes Big Bertha, also known as the IRS. Deduct 30% for federal, state, and local taxes, which brings your monthly take-home to $3,373.13.

Now let’s say you purchase a $165,000 home with no money down and a 30-year fixed-rate mortgage at 5% interest. Your mortgage payment will be $885.76. Assume property taxes to be about 3%, which is $4,950 annually. That’s $412.50 per month. (My husband’s and my property taxes were a lot higher than this, but we are from a ridiculously expensive state). Ok, here’s your monthly budget:

$3,373.13

-$885.76 (mortgage)
-$412.50 (property taxes)
-$150.00 (heating, cooling, and electricity, which will vary by state and climate)
-$100 (phone/cell)
-$100 (cable, internet)
-$300 (car payment)
-$100 (car insurance)
-$400 (groceries)
-$200 (gas)
$724.87 (surplus)

Now, how are you going to spend that extra $725 per month that you have lying around? Movies, clothing, furniture, meals out? Oh, wait, I forgot one of the most important deductions. Your student loan! Let’s take away $654, assuming you have $100K in student loan debt at 6% interest amortized over 30 years. That leaves you with $71. You can spend it however you want – credit card bill, clothing, dates (which you probably won’t have many of, since people with six-figure debt do not have much value on the marriage market), anything! Just be sure not to have any emergencies, like a broken down car or a molar in need of a root canal.  And absolutely no vacations or kids!  (If you really want to find some extra cushion in your budget, you can always drive a beater until you are sixty, or take on a second job.)  But remember, it is all worth it because you are a prestigious attorney.

If you are considering law school, think about whether you actually want to practice law, and are willing to mortgage your future in the hopes of successfully building a career in a field in which salaries continue to decrease, as well as demand. Do you think you will be able to later out-earn your current financial stupidity?

Law schools lie about employment statistics.

Another topic not discussed at orientation? Graduate employment statistics. The speakers did not clarify whether the 97% boasted at my school reflected the number of graduates who were actually employed in the legal field, or if that figure included graduates who were forced to find work in other lucrative fields. Nor did anyone discuss the way in which employment statistics are calculated, and whether the statistics are actually plausible.

If you are considering law school, the first thing you should do is write down a list of the schools you would like to attend.  Then pick out your top choice, and get your hands on a list containing the names of its most recent graduates.  (Try attending a graduation and obtaining a program there, or call up the school and say you had a relative who recently graduated and were wondering if you could get a copy of the program.)  Now the real fun will begin.  Wait a few months, then go to the Bar website for the state in which the school is located and start looking up the names of the graduates.  See how many you find that list an actual employer under their contact information, rather than their home address.  For the names that do not appear anywhere, begin looking those up on other Bar websites until you have exhausted all of your resources.  Now count the names of those who you did not find, or who did not list an employer in their contact information.  Take that number and subtract it from the number of total graduates you looked up.  Then divide that number by the total number of graduates you looked up and you will arrive at an accurate employment figure.  But that will all take too long or require too much effort, you say?  I say you’re right, it’s better to just go six figures into debt by relying on a brochure than to conduct any actual research yourself.  I'm sure the guy who wrote the brochure dotted his i's and crossed his t's.  I mean, what's in it for him to fudge the numbers? (I should probably warn you that your hesitation at embarking on such an involved research assignment does not bode well for your future as a practicing attorney.  Just sayin’.) 

The Bottom Line

My point in discussing the flawed law school model is not to piss on anyone's dreams of becoming the next Perry Mason. What I would like to see is transparency in advertising employment statistics, frankness when discussing job prospects with students, course offerings in how to run one's own practice, tuition rates that reflect current market demand and compensation, and more opportunities for students to observe and experience the reality of law practice.

Are you considering law school? And if so, is there anything that could convince you not to go, or do you think you have made up your mind no matter what?

How Many Doors Did Your JD Open?

For anyone who's bitter about high student loan debt and/or the dearth of (paying) legal jobs out there, check out this piece from Nando of Third Tier Reality, which sheds some unflattering light on the higher education scam.  It includes some sobering statistics regarding the glut of student loan debt in the U.S., the lack of available jobs that require advanced degrees, as well as the frighteningly inflated tuition prices some law schools are charging their "customers" these days.  

Also, if you feel like getting involved in protesting or sharing your views on the higher education scam, check out the upcoming protest scheduled to take place October 8th in San Diego, California. 

You Are Not Alone

Whenever I begin to think I'm the only lawyer out there who's happier doing admin work, I am reminded that I am not a beautiful and unique snowflake.  In this edition of Dear Prudence, a woman who once practiced law and now works as a secretary, seeks advice from Prudie on how to respond to the snobby comments she receives from friends who look askance at her.    One thing I love about Prudie is that she is aware of how tough the legal job market is these days and acknowledges that a JD is not something to boast about on a resume.  You tell 'em, Prudie.  Scroll down to the second letter.  Oh, and be sure to read some of the comments below the column, which are often more entertaining than the column itself. 

The Trap of Student Loan Debt, Part I

Many people who would like to quit practicing law have an enormous hurdle to overcome before they can even consider it: all that student loan debt they took out to receive those invaluable JD's (which caused that slew of doors to fly open upon graduation, right?  Or did you miss that?).  

Rather than repeat myself by reminding you that a JD does not make one more marketable, and in fact works against one's marketability, I would like to discuss a more positive topic, that of paying off these soul-sucking debts and getting out of student loan prison forever.

Before I left the law, I assumed that the size of my debt would render me unable to pay off my loans any sooner than the 25-year repayment period I had agreed to just a few months after graduation.  I think the fact that I was practicing law somehow helped me justify a longer repayment period.  After all, if I was actively using my degree on a daily basis, the expense seemed like the cost of doing business.  And since I owed about $80,000, I figured 25 years seemed reasonable.  

Once I left the law, I began thinking more about my financial future and became angry that I had made such stupid financial decisions.  I had basically trapped myself into working full-time in a field I hated for the better part of my adulthood.  Was I going to die a bitter, alcoholic ex-lawyer, still owing thousands to Sallie Mae upon my death?  I couldn't believe my life was becoming an Arthur Miller play.

I should backtrack a little here and fill you in on my professional transitions since my first temporary gig ended.  That gig netted me about $380 per week.  Once that job ended a few short months later, I obtained another job at a call center (my personal low), and then miraculously I was offered a permanent, full-time position at my husband's company working in customer service.  This all happened within one month after leaving my first temp job.  The salary at my customer service position?  $33,000 per year.  Not quite the almost $60k I was making as an attorney, but it would do since it came with benefits and a guaranteed paycheck.  When I accepted that position, however, I did something radical.  I decided not to quit my call center job right away, and instead I cut back to part-time three evenings per week.  So I was working about 55 hours per week, with a combined income (from both jobs) of about $42,000 per year.  Coupled with my husband's income, we would still be doing pretty well, except for our crippling student loan payments. 

My payments totaled about $565 per month, and my husband's were $180.  So basically, we were paying two mortgages, our real mortgage and our student loans.  And the payments were only going to go up because we were both on graduated repayment plans.  Thinking about these numbers is what led me to work two jobs and try to come up with a plan of action.

I didn't have time to think long because about a month after working my two jobs and getting used to my new, hectic schedule, my husband was offered a position with a higher salary about two thousand miles from where we lived.  In a matter of three weeks, we had to put our house on the market, find an apartment in our new city, and pack up.  It was exciting, but scary.  I had no idea what I would do for work, but I was looking forward to the opportunity to start over with a clean slate in a completely different area of the country, where no one would know me as an attorney. 

Fast forward a month after we arrived (which was November of last year).  I am once again an administrative assistant (pretty high level) and I assist professionals on an individual contract basis as needed (a few hours per month).  Everyone I work for knows I used to practice law and no one seems to have a problem with it.  And the real plus side is that I now make 30-40% more than what I used to as an attorney.  This can be attributed in large part to a different job market, but since my husband and I have managed to keep our expenses down, it has made a huge impact on our budget, so much so that I am now hopeful about seeing my student loan balance decrease to zero within the next few years.  

I can't really attribute my new found hope to a simple increase in salary, though.  In reality, I can attribute it to discovering Dave Ramsey's plan for living debt free and building wealth slowly.  It's funny, I disagree with him on so many things - religion, politics - but his books and podcasts have been so inspiring that I don't really care about our differences, as long as I am getting out of debt. 

And I am, more and more each month.  In fact, this month my husband and I are paying off our car (the big shiny one I bought a year and a half ago to try and make me feel better about practicing law), and then we are on to the student loans.  It is not easy, and I am still resentful of the law school scam, the higher education scam, and every other scam I've been taken in by as an adult.  But I figure if I am ever going to have a chance at the life I want (a little cabin somewhere with my dog, my husband, and some good books wouldn't be bad), I am going to need to pay off my "stupid tax" sooner rather than later.

I am going to discuss more of the particulars of my get-out-of-student-loan-debt plan in my next post, but for now I just wanted to put something positive and hopeful out there.  A year ago, I was miserable and depressed, thinking I would forever be in debt and would never be able to have children or even take a vacation.  And now I am getting closer and closer to being debt-free.

Life can be so shitty sometimes, but every once in a while it is simply amazing. 
  

Are your student loans or other debts holding you back from the life you want?

From Humility to Humiliation

So where were we? I had just been informed that my temporary admin assignment was going to end after only three short months. My job prospects were pretty slim considering I had just left the legal field and it had taken me months (almost a year?) to find a non-legal job. I felt alienated from everyone – my husband, family (I’ll get to that in another post), friends, former colleagues. Is there any worse feeling than being surrounded by loved ones and feeling totally alone? I even stopped answering my phone because I knew my friends would ask the basic catch-up questions about career, family, and upcoming vacations.

In the meantime, I was still going to work every day, with no real defined expiration date, but I knew I had to act fast. At that point, I simply needed to find a job –any job- that would provide a steady stream of income while I thought about my next move. After all, I still had student loans to pay. So I did something desperate. I applied for a job at a call center. A specific call center. It had always been in the back of my mind as an “in case of emergency” plan. Like the fire escape ladder tucked behind the shoe rack in my closet, I had hoped I would never have to use it.

Did I mention that when I practiced law, I primarily worked as a criminal defense attorney? This little tidbit weighed heavily on me when I decided to apply at “SIP, Inc.,” aka “Suicide is Painless, Incorporated.” You see, the reason I knew the place would probably hire me is because I used to send my clients to them when they needed to find jobs prior to sentencing. No one in their HR department had ever heard the term “background check,” much less performed one. While completing the online application, all I could think about was how I would respond if I ran into a former client. This had happened a couple of times in the past, but I always knew the attorney-client privilege obligated me to ignore them unless they acknowledged me first. I was guessing, however, that if a former client saw me working at the call center, they would probably have a couple questions for me. I decided that if I ever encountered this situation, I would simply lean in, lower my voice, and tell him I had switched to the journalism field and was doing undercover work for an exposé on the various indignities suffered by those who work for minimum wage. I sort of borrowed the concept from Barbara Ehrenreich’s Nickel and Dimed, which I had been required to read in a college sociology course, back when I believed higher education would guarantee me a safe, journalistic detachment from the working poor.

The actual application process did not involve uploading a resume or references. All I had to do was list my former employers and contact numbers for them. Since I knew none of my former work places would be contacted, I did not hide the fact that I worked at a law firm. I just did not fill out the section that asked for position titles. Again, I knew no one would read the application; they basically interviewed and hired everyone because of so much turnover. I also disclosed my JD on the education section, knowing the person who read it probably did not know or care what a JD was. A few days after submitting my application, I was contacted by an HR representative who asked me to come in for an interview. This process consisted of taking basic reading and spelling tests, and being introduced to the call center equipment (a headset). If I could spell “sandwich” (the judges probably also would have accepted “sandwhich”) and wear the headset without asphyxiating myself, I was in. I almost cried when they offered me a position, mainly because of the indignity of it all, but somewhat because I knew I would be able to make my student loan payment and possibly even help with other monthly bills.

I also felt a certain sense of relief at having hit bottom. How could things get any worse?

As a side note, I feel like I should be describing the changes occurring in my marriage at this time, but since so much happened at once, that will most likely be my next post. I have come to realize that the only way to eat an elephant is one bite at a time, so I am going to cover only one major change per post until I catch up to present day…

The Man Behind the Curtain

Remember the scene in the Wizard of Oz when the main characters discover the wizard is not so magical after all? It sort of reminds me of a blog I recently came across, entitled, "Exposing the Law School Scam." It completely sucked me in. The lawyers on this blog contend that law school is nothing more than a "man behind the curtain" scenario, as in the Wizard of Oz. Law schools falsely advertise misleading employment and salary statistics and trick uninformed young hopefuls into believing that a J.D. is a magical, Golden Ticket into the land of wealth and prosperity. In fact, nothing could be further from the truth.

At least that's what the lawyers at "Exposing the Law School Scam" claim. I can't say I experienced the same trouble finding gainful employment after law school, but I will say that I definitely had a rosier picture of the legal profession when I entered law school than when I left it. I recall attending orientation about a week before the start of my 1L year, when one of the deans pontificated on how many doors a law degree opens. Pffft. Man, if only I had a time machine and a large polo mallet. The only "doors" my law degree opened were to my therapist's office and the temp agency for which I currently work.

It's not all the law school's fault, though. Sure, they probably inflated their employment statistics, but that's not the real problem I have with them. My beef is they tell incoming law students that a law degree is a great career investment for just about any field you may want to enter. This is simply not true. The truth is a law degree is a terrific investment if you want to be a practicing attorney. If not, DO NOT, I repeat, DO NOT GO TO LAW SCHOOL. It is a waste of time and money unless you are absolutely, positively, one hundred percent sure that you want to represent clients for 60+ hours per week, most of which will be spent arguing with other attorneys and reviewing long-winded case law in search of a magic piece of dicta that you can include in your brief to win your client's case. If this does not sound like an appealing career path, run, don't walk, to the registrar's office and drop all of your classes. If you do it soon enough at the start of the semester, you may even get some of your tuition back.

My other beef with law schools is what they do not tell you at orientation: if you do not fall within the top 10-20% of your class, you will not be earning a six-figure salary upon graduation. The reason they do not tell you this is because were it not for the bottom 80-90% of students, there would be no such thing as the order of the coif. Big Law firms could not tell their clients that "our attorneys were all in the top twenty percent of their law school classes." So, law schools and big firms need that bottom 80-90% in order to distinguish the great legal minds of tomorrow from the Lionel Hutzes of the legal world. The truth is that if you do not rise to the top of your class, you will most likely be working as a prosecutor or public defender, or will be working for a small firm that will pay you only a fraction of what Big Law pays, which will probably not be enough to cover your law school debt. The other alternative is that you can hang out your own shingle, which, from what I've heard, is not exactly lucrative.

What do you think of the law school scam? For those of you who did not graduate in the top 20%, what kind of work did you find after law school?