Is Law School Worth It? New York Times asks 4th Tier Debt-Dodger

I read the New York Times almost every morning. It is undoubtedly our country’s newspaper of record, and its articles are usually thorough in their ability to break down complex world events and developments clearly. Nevertheless, I was disappointed after reading David Segal’s article on the front page of last Sunday’s business section, titled Is Law School a Losing Game?

This certainly is not the first article to address the tight job market for newly minted lawyers. When the recession hit, it forced big law firms to downsize and rethink their business model in response to the declining demand for legal services. (Turns out, other firms that produce, say, cinnamon buns, tires, or anything else likely did the same thing). While Segal addresses the economic downturn, his main focus is actually broader in scope, and asks the simple question: Is Law School worth the $120,000 investment? The person that Mr. Segal chooses to present this question to is Michael Wallerstein, a recent graduate of a 4th-tier law school in San Diego who refuses to answer calls from debt collectors.

Admittedly, the article does actually discuss some very important aspects of the current legal landscape:

1. Law schools get very creative with the data they present to prospective students:

One rosy statistic law schools release is the “percentage of graduates known to be employed nine months after graduation.” The most recent stats show that 93% of law school grads were working, which paints a beautiful picture of young men and women proudly accepting their law school diploma, putting on sharp new suits, and walking straight into some law firm (where they will be named partner in fifteen years). The picture looks a little bit dimmer, Segal points out, when you realize that this statistic includes any type of employment. The editor of the Law Review, who is now working at Latham & Watkins is in the same 93% group as the guy that squeaked by at the bottom of his class and is now bartending at that hotel by the airport.

This may seem deceptive at first, but how else should law schools define employment? If you only include legal jobs, than you exclude the airport bartender, but you also exclude the law school grad that takes a quality business affairs job.

2. Although the total number of legal jobs is shrinking, the number of J.D.’s keeps increasing:

This is not breaking news by any means, but it is the most legitimate and important trend that Segal sheds light on. Somehow, the market for lawyers refuses to adhere to those magic forces of supply and demand. New law schools continue to open, and existing law schools continue to pack in students as though there was an increasing demand for lawyers. Sadly, this leads to many students who graduate with mountains of debt and no high paying legal job to help pay it off.

Segal attributes part of this to the current crop of twenty-somethings and our belief that we are all special and capable, and this is an interesting (if not dangerous) generational phenomenon. More importantly, Segal points out that there should be a contraction in the market for J.D.’s, rather than the 11% growth that we have seen over the last decade or so. (Segal should also forward this memo to the NBA and NHL).

While the above arguments are important for anybody considering law school, the individual that Segal chooses to present the image of a recent law school graduate is not exactly representative. Below are some great quotes from Segal and Michael Wallerstein:

“When he started in 2006, Michael Wallerstein knew little about the Thomas Jefferson School of Law, other than that it was in San Diego, which seemed like a fine place to spend three years.”

Wow. That’s like saying “When he took out a $120,000 loan to buy that new Maserati, he knew very little about the car, except that it had a steering wheel, and it was really shiny!” Blueprint founder Trent Teti has been known to spend weeks researching coffee makers before making a decision; you should probably spend some time looking into law schools.

“This is all complicated by the reality that a small fraction of graduates are still winning the Big Law sweepstakes. They tend to hail from the finest law schools, and have the highest G.P.A.’s.”

What is controversial about this? Of course law firms want students with the highest law school G.P.A.’s, and of course they would prefer to hire a lawyer from a top tier law school over a 4th-tier law school, all other things being equal. Do we really need a warning label to communicate this? And would it make a difference to all of us twenty somethings who apparently think we are capable of anything?

Mr. Wallerstein is a quarter of a million dollars in the hole. One of his techniques for remaining cool in a serious financial pickle: believe that the pickle might somehow disappear. ‘Bank bailouts, company bailouts — I don’t know, we’re the generation of bailouts,’ he says in a hallway during a break from his job. ‘And like, this debt of mine is just sort of, it’s a little illusory. I feel like at some point, I’ll negotiate it away, or they won’t collect it.’

For all of you studying for the February LSAT: The above argument is flawed because it fails to consider the possibility that:

(C) The banks absolutely, 100%, will continue to hound Mr. Wallerstein for the money he borrowed. They will do this with a relentless, methodical persistence that will follow him until his golden years if need be. They may even hire Dog the Bounty Hunter to seize his surfboard.

Granted, it’s a little wordy for the LSAT, but (C) is definitely the correct answer. The bottom line is that you can’t simply label law school a “winning” or “losing” game. There are many factors that justify or reject the idea of taking out six figures in debt to get a law degree, and students should be personally responsible for weighing these considerations.

“Wallerstein’s fiancee seems unperturbed by his dizzying collection of i.o.u.’s. Despite those debts, she hopes that he does not wind up in one of those time-gobbling corporate law jobs. ‘We like hanging out together,’ she says with a laugh. If love paid the bills, these two would be debt-free tomorrow. But it doesn’t.”

Oh boy…