Second/Third Tier College Ripoffs

Finally, an article from Forbes that asks the question, ""Why do second and third tier schools cost as much as Harvard?". The author says the answer is because they can!

We believe that as long as the gov't provides the funding needed for college loans and colleges are free to charge what they want because there is no free market for education, the situation will exist.

• The author believes that over the last 30 years the demand has risen for college education and supply has not kept up.
• But financially unsavy parents are also the problem and their notion that a higher price makes something better. The author puts it best: " For parents like that, in fact, price may be part of the appeal. It's what's known in college circles as the "Chivas Regal effect" - a lofty price is a sign of status; discounting would tarnish the image."

http://money.cnn.com/2009/04/10/news/economy/kaplan_college.fortune/index.htm?postversion=2009041007

Much Education Not Worth The Price

ABC News reporter John Stossel profiles the plight of many students:

• "Promised" a great job after graduation and pushed by high school/college advisors to take out massive amounts of loans, young people have large loans they can never get rid of and lack the job they were promised
• Do not get a major that is not directly relatable to a real world job
• Instead, many teenagers should recieve technical training at a trade school or community college for low cost that will give them real world skills and a good job with no loans

http://abcnews.go.com/Business/Economy/story?id=6654468&page=1

The Story of Many in One Lawyer's Plight: Doing a Good Job is Not Enough

An ABA Law Journal article, "Laid-Off Lawyer Competes with Other Attorneys for Paralegal Jobs," describes how the economy has impacted one 43-year attorney in Los Angeles: 

• She lost her job. 
• Her husband, also an attorney, has been losing clients.
  
• They fell behind on mortgage payments.
• The stress caused trouble in their marriage, and they separated. 
• She is applying for paralegal jobs, and has been rejected: She said, "After a while with the paralegal jobs, the listings said, 'No attorneys.' I think it's because they figured attorneys would leave as soon as they found work as lawyers." 

The article says that things "have been looking better for her" because she landed consecutive temporary jobs.  This attorney pithily captures the spirit of the times: "I did a great job at work and I thought that was enough, and it's not anymore."

http://www.abajournal.com/weekly/laid-off_lawyer_competes_with_other_attorneys_for_paralegal_jobs

A Good Job Without College?

Check out this article form CNN Money: "Good jobs with a high school diploma."  

http://money.cnn.com/2009/02/06/pf/saving/toptips_findingwork_willis/index.htm?postversion=2009020613

Are law schools "exploiting" 80 - 90% of their students?

Criticism of Law Schools
Speaking at a January 9 program, sponsored by the Association of American Law Schools, the dean of New York Law School, Richard Matsar, said, "We should be ashamed of ourselves. We own our students' outcomes. We took them. We took their money. We live on their money . . . And if they don't have a good outcome in life, we're exploiting them. It's our responsibility to own the outcome of our solutions. If they're not doing well . . . it's gotta be fixed. Or we should shut the place down." (As transcribed on TaxProfBlog.)

Law schools may have many failures, but the shrinking legal market is showing that the failure of an education costing more than $120,000 to pay off for so many students might be the greatest one.

Some Questions to Consider
Does law school pay off as an investment?

• Is going to law school a "lottery" to be in the top 10%, as some critics are suggesting?
• Are monetary gains the only reason students go to law school? If there is another reason, are law schools the most efficient means to the goal?
• Assuming the recent criticism of law schools is justified, accurate, and correct, what can law schools do to remedy the problem? How can law schools get more students hired?

Brief Reflections
Criticizing law schools and higher learning institutions is easy. Thinking about ways to create better systems is much harder.

Ultimately, I believe that students and prospective students should be aware of the current problems and they should engage in a cost/benefit analysis to see whether the very expensive investment of law school will pay off by leading them to their goals.

Resources on the Criticism
The recent criticism is well summarized by the ABA Law Journal in "Law Dean Says Schools 'Exploiting' Students Who Don't Succeed."
http://www.abajournal.com/news/law_dean_says_schools_exploiting_students_who_dont_succeed/print/
TaxProf Blog succinctly excerpts the critical commentary and has interesting comments that follow the excerpts in "Is the Law Professor Gravy Train Over":
http://taxprof.typepad.com/taxprof_blog/2009/01/is-the-law-professor.html

The podcast of the AALS Committee on Research Program (Jan. 9, 2009), "Citations, SSRN Downloads, Carnegie, Bar Passage, Careers: Competing Methods of Assessing Law Schools" is available online:
http://www.aalsweb.org/fri/commresearch.mp3

Are associates really competing for tasks with paralegals?

A National Law Journal article -- "As support staff layoffs continue at firms, attorneys learn to share resources" -- reports on the increasing number of layoffs of support staff in law firms. It also suggests that some associates might be keeping their billable hours up by doing paralegal work.
http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202426604353

Articles, such as this, show the kind of decisions that partners, associates, and their support staff are having to make in a down market.

It is important to note that firms are being affected differently by this economy: "'In good times, you'll see firms that have built up some extra fat in their administration. Some of these staffs have gotten really large, and they will cut nonessential positions,' Altonji said. 'Other firms will cut into the bone, and make cuts that aren't prudent. Essential services could be curtailed.'"

Job Search Advice for 1Ls in this Legal Market

This AmLawDaily article -- "Letter to 1Ls: We're Scared to Death!" -- demonstrates how the changes in the legal market are affecting students, even in their first year of law school ("1L").
http://amlawdaily.typepad.com/amlawdaily/2008/12/open-letter-to.html

The article gives good advice:

• Don't neglect your grades.
• Don't put all your eggs in one basket.
• Be specific in your cover letters.
• Demonstrate a connection to the location you are applying to.

I believe that the this advice is very important to follow. It is especially easy to neglect your grades in your first year with anxiety over jobs. Please remember, that focusing on getting great grades and getting the most out of your education should be your job right now.

In your first semester, focus on learning the new, and sometimes awkward, language of the law. Turn your attention to applying for jobs during the holiday break.

Legal Job Market Shrinks

A CnnMoney article reports: "Verdict is in: Legal job market tightens."
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:

1. 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!
2. 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.'"

Best Majors By Salary

PayScale has created a list of the most common college majors by salary potential.
You can look up the median starting salary and the median mid career salary by major.
The major disadvantage is that the list is not organized by highest salary major to lowest.

When deciding what career to pursue be sure to factor in what you will be earning.
These are only general median salaries (you may earn more or less based on your area and the economy). Your choice of major and salary potential should be an important factor in your choice of school and how much loans you take on.


http://www.payscale.com/best-colleges/degrees.asp

Top State Universities For Earning the Most Money

PayScale has created a list of the top state universities by salary potential.
You can look up the starting median salary for the schools and the mid career median salary.
This is an overall median salary, be sure to note that your major may put you above or below the median.
The only disadvantage for the site is that the schools are not arranged by highest to lowest salary. Also, be sure to factor in that graduates may have a higher starting salary in higher cost city areas (but also a higher cost of living).

http://www.payscale.com/best-colleges/top-state-universities.asp

Will your education pay off?

I am always reading stories about people who take out debt for college and for graduate school and anticipate riches in the future.

For an example about a person who went to law school and who expects the debt to pay off, see http://www.ireport.com/docs/DOC-133729

Although this story could be true for a small percent of students, it certainly is not true for many that I know. I know far too many people who have graduated with professional degrees but are struggling to find a job. They are now deferring their loans payments.

You need to ask yourself a key question, "Will my education pay off?" More on how to answer this in later posts.

Volunteer to Advance Your Career

I recently spoke with an attorney who reminded me of the value of volunteering. This attorney has volunteered in a number of ways. For example, he was volunteered at soup kitchens and he continues to take pro bono cases. He told me that volunteering opened doors for him that would otherwise have been closed. He even received and continues to receive recognition from judges, colleagues, and clients.

When you volunteer, you serve others and you give back to the community. But my conversation today reminded me that when you volunteer, you get back a lot more than you give.