http://money.cnn.com/2008/12/03/news/economy/legal_industry/?postversion=2008120305
In short, just as in other areas of the economy, lawyers are losing their jobs, and recent graduates are finding it hard to get a job.
There are at least two important takeaways from this article:
- In this market, getting a J.D., or even an LL.M, does not guaranty a safe, secure job. The tune that you have to go to school to find a safe, secure job is ringing hollow. One student's experience in the article shows this: "In addition to his living expenses, Magdy has about $150,000 in student loans and the first payments are due in the middle of this month." So, before you sink yourself into debt for a school loan, think carefully!
- Students must study their profession. Within the law, some areas are doing well: "While hiring is slowing in certain areas, including real estate and M&A, there are other opportunities for lawyers that are flourishing in the current climate, Pierce Stronczer said, specifically, 'litigation, intellectual property, white-collar crime and bankruptcy, of course.'"
2 comments:
I find this to be a very narrow view of the legal profession - and from a terrible source none other than CNN. Perhaps during times like this it is important to view the flip side of the issue. Many people are out of jobs - this is one of the better times to educate yourself. And we live in such a society of debt - don't you think education is the best debt a person can have? It is not the same as debt for the purpose of vanity...no? What about the person who does not fit nicely into categories that afford them scholarships, financial aid or self financing? Those people should not get a law degree? Furthermore, this article focuses narrowly on traditional legal professions and fails to focus on the benefits of the education itself or other professions that are enhanced by a law degree. I am curious whether the person posted this article is legally employed as they are listed under the legal industry??? Thoughts?
Anonymous --
Although I admire your idealistic view of education and its value, the numbers don't always add up.
The FinAid Loan Calculator shows that idealistic sentiments about education should be tempered with realistic information about what taking on a debt really entails.
http://www.finaid.org/calculators/loanpayments.phtml
The CNN article mentions Mr. Magdy and his $150,000 debt. Putting $150,000 into the Loan Balance calculator provides the following picture for payments over 30 years:
“Loan Balance: $150,000.00
Adjusted Loan Balance: $150,000.00
Loan Interest Rate: 6.80%
Loan Fees: 0.00%
Loan Term: 30 years
Minimum Payment: $50.00
Monthly Loan Payment: $977.89
Number of Payments: 360
Cumulative Payments: $352,037.80
Total Interest Paid: $202,037.80
Note: The monthly loan payment was calculated at 359 payments of $977.89 plus a final payment of $975.29.
It is estimated that you will need an annual salary of at least $117,346.80 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 1.3. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $78,231.20, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.9.”
Opinions are important, but they should be supported by financial reality.
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