latest doom and gloom NYT article on law school prospects

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ryemanhattan
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latest doom and gloom NYT article on law school prospects

Postby ryemanhattan » Fri Mar 23, 2012 2:38 pm

This:
http://www.nytimes.com/2012/03/20/busin ... davidsegal

Anyone else, particularly those looking at paying sticker, terrified?
Segal has been putting out hit pieces on law school as an institution for over a year now, so I take them with a grain of salt. But speaking to my UG school's law school adviser, and several attorneys, professors, and people who I trust have some sense of larger industry trends, I've heard of many of the same troubling things this article mentions.

Personally, I'm having a hard time making the numbers work. Northwestern is a great school... that will put me a quarter million dollars in debt. If we calculate interest at 7%, that's a bit more than 20k/ year to start with. Even if can count on a starting salary of $160k how the hell does this make any financial sense? It will take me a decade of law school and then 70 hour weeks to break even. Even in the best case scenario (7% interest is a bit kind and BigLaw isn't a certainty, even out of NU) I look at this as voluntarily entering a life of indentured servitude.

It is entirely possible that the job market for recent law grads will be markedly worse in three years. There's been a slight rebound from a couple of years ago, sure, but I'd be gambling on so many factors outside of my control: trends in the legal profession, the EU keeping their shit together, under $6/gallon gas. This economy/ society is fragile. The legal profession is in flux.

I'm still weighing some less expensive school options. I still think I could thrive and succeed in law school and in the legal profession. I want to go. But even with my relatively decent school options this just seems like a potentially devastating route.

Uncool story.

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FlightoftheEarls
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Re: latest doom and gloom NYT article on law school prospects

Postby FlightoftheEarls » Fri Mar 23, 2012 3:01 pm

ryemanhattan wrote:Uncool story.

I love that people are preempting TLS's standard responses now.

TheZoid
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Re: latest doom and gloom NYT article on law school prospects

Postby TheZoid » Fri Mar 23, 2012 3:38 pm

I'm not trying to pretend that the legal market is good by any means or that attending TTTs at sticker (or at all) is a good idea, but I feel like some of the law school gloom and doom might be a little short-sighted. Yes, attending at sticker is risky given that not all T-14 grads are biglaw secure, and if you miss biglaw it might not be pretty. However, after the initital hardship of paying your loans off, there is the potential to make some money down the road. There are plenty of private practice lawyers making 2-300K out there (and some more), which I think most people can agree is a good living. If you really want to be a lawyer and plan on being in it for the long haul, I really think you should go to NU.

tl;dr after ten years of misery struggling to pay your loans back, your life might be halfway enjoyable

NoJob
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Re: latest doom and gloom NYT article on law school prospects

Postby NoJob » Fri Mar 23, 2012 4:06 pm

OP, the numbers are even worse. Remember that the interest on these loans will start accruing the moment that the loans are issued. This means that interest will begin accruing on this non-dischargeable debt while you are in law school. You can't really make payments on this debt while you are in law school.

Next, the interest on student loans is like credit card interest meaning that they become part of the principal (and interest is added on to them as well). So the actual amount that you will have to repay is higher.

Assuming that you get biglaw out of law school, then you can work very hard and throw every cent you have at your student loans. If you can stay employed at biglaw for a couple of years (no easy task these days), then you have the potential to pay back your loans.

Also, if the flux in the legal economy forces you to stop paying and take either a forbearance or go on IBR, the compounding interest will quickly raise the principal. You should go on IBR then assuming the rethuglicans don't do away with the program. If they do, then you are screwed and may as well leave the country.

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Re: latest doom and gloom NYT article on law school prospects

Postby NoJob » Fri Mar 23, 2012 4:11 pm

"However, after the initital hardship of paying your loans off, there is the potential to make some money down the road."

If one doesn't get biglaw right out of law school, it is extremely unlikely that any new lawyer can earn enough to make payments that are big enough to lower the actual principal on a 160k loan.

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bernaldiaz
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Re: latest doom and gloom NYT article on law school prospects

Postby bernaldiaz » Fri Mar 23, 2012 4:16 pm

Dear NYT,

Please keep publishing these articles.

Signed,

Someone applying next cycle

09042014
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Re: latest doom and gloom NYT article on law school prospects

Postby 09042014 » Fri Mar 23, 2012 4:28 pm

If you can pull big law, you can pay it all off in 5 years. (5th year associate salary is 230,00). You'll have good exit options with good earning potential, and have no debt.

But lasting 5 years is tricky. And a lot of people (maybe 20-30 at NW) don't get big law. In that case you are pretty fucked.

But getting big law is definitely not winning the lottery.

ryemanhattan
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Re: latest doom and gloom NYT article on law school prospects

Postby ryemanhattan » Fri Mar 23, 2012 4:38 pm

I'm also 32... my returns have already begun to diminish on this investment. It's really the idea of being trapped in biglaw that sounds unappealing. I could succeed at a big firm, yes... but I've never been beholden to anyone, ever.

Fight ten years to attain a "halfway enjoyable" life? My life is, at present, fully enjoyable. I can keep working in restaurants and bars in CA and making decent money, take vacations when I want to and don't ever have to work for someone I don't respect.

As for the idea of 250k debt and NOT landing a $160k/ year job: unimaginable. But it is going to happen to a lot of people. If I go to Northwestern, I don't think it will happen to me, but some of that risk is outside of my control.

If I can get UC Irvine, or Boulder, to offer me enough $$ to get total debt down towards $100k, fine. If I get into UVA off the waitlist, that would be compelling, and slightly cheaper that NU, but still risky. I can live out of an RV in law school, maybe bartend two nights a week in 2L/3L to cut the costs down. I want to make this work.

Plan B/C: my gf is from New Zealand, so I could move to Auckland and open a bar in a year or two and/or go get an MBA in a couple of years for $7k/ year once I am a permanent resident. But I love this country, and I don't want to run. The idea of not spending much money on health care or education for the rest of my life, however, is compelling. We are in decline, yes. But I'd rather stay and try and help this country function than take off just because I have an out.

@Bernal.... the effects of articles like this will only have a major effect on admissions at schools you don't want to go to. The T14 won't see much of a difference, although schools might get less aggressive with tuition hikes (except the UC schools, which will have no choice). This article is not the reason I am leaning away from Northwestern, but it does reiterate what I've heard elsewhere.

@desertfox... thanks for the input. I really like Northwestern. I would love to go there. And I think I could make it work. But it's a colossal gamble with legit downside. If debt were more like $150k, I would absolutely go.

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hung jury
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Re: latest doom and gloom NYT article on law school prospects

Postby hung jury » Fri Mar 23, 2012 4:39 pm

bernaldiaz wrote:Dear NYT,

Please keep publishing these articles.

Signed,

Someone applying next cycle


To some extent I think there was/is a lag effect as regards these kinds of articles and students choosing to go into law; the effects are only now starting to be seen. How many people come on here and refuse to face the evidence that their school isn't worth it because they are emotionally committed to going to law school? It is a lot easier to convince people not to go to law school when they aren't far enough along in the process that they are TLS members, etc. Well, the doom and gloom has now been around long enough that it has affected the decision making of people who might have considered going to law school but weren't involved enough in the process to be obstinate in their decisions.

So I'd be really surprised if there is an uptick in applications next year even if the articles relent a little; the word is out that law school is a bad deal and it'll take NY to 190 or something similar to reverse the trend. The only question is probably whether things will level off or whether they'll keep dropping. I'm guessing the latter.

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Tiago Splitter
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Re: latest doom and gloom NYT article on law school prospects

Postby Tiago Splitter » Fri Mar 23, 2012 4:43 pm

NoJob wrote:Next, the interest on student loans is like credit card interest meaning that they become part of the principal (and interest is added on to them as well). So the actual amount that you will have to repay is higher.


Not that it makes a huge difference, but this is incorrect. Interest does not compound while under IBR.

http://www.ibrinfo.org/faq.vp.html#_How_does_IBR_

lawlcat4179
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Re: latest doom and gloom NYT article on law school prospects

Postby lawlcat4179 » Fri Mar 23, 2012 4:53 pm

ryemanhattan wrote:This:
http://www.nytimes.com/2012/03/20/busin ... davidsegal

Anyone else, particularly those looking at paying sticker, terrified?
Segal has been putting out hit pieces on law school as an institution for over a year now, so I take them with a grain of salt. But speaking to my UG school's law school adviser, and several attorneys, professors, and people who I trust have some sense of larger industry trends, I've heard of many of the same troubling things this article mentions.

Personally, I'm having a hard time making the numbers work. Northwestern is a great school... that will put me a quarter million dollars in debt. If we calculate interest at 7%, that's a bit more than 20k/ year to start with. Even if can count on a starting salary of $160k how the hell does this make any financial sense? It will take me a decade of law school and then 70 hour weeks to break even. Even in the best case scenario (7% interest is a bit kind and BigLaw isn't a certainty, even out of NU) I look at this as voluntarily entering a life of indentured servitude.

It is entirely possible that the job market for recent law grads will be markedly worse in three years. There's been a slight rebound from a couple of years ago, sure, but I'd be gambling on so many factors outside of my control: trends in the legal profession, the EU keeping their shit together, under $6/gallon gas. This economy/ society is fragile. The legal profession is in flux.

I'm still weighing some less expensive school options. I still think I could thrive and succeed in law school and in the legal profession. I want to go. But even with my relatively decent school options this just seems like a potentially devastating route.

Uncool story.


I think you are on the right track. The amount of debt you would have from NU is ridiculous. At least in my opinion, paying sticker for NU is insanity. Especially when you factor in that you are 32 years old. I'd rather be at a T30 for less than 50k in debt than NU at sticker. What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw. As you mentioned, not getting biglaw is also a realistic outcome from NU. At least if you go to a lower ranked school and don't quite get what you want, you won't be completely screwed. If you can get into a T30 for minimal debt, you also will at least have some (~20%) chance of getting biglaw anyway. And in this situation, if you did land biglaw from a T30, you'd be in an infinitely better position.

But looking at your profile, you non NU options don't look the greatest. Maybe if you could negotiate WUSTL up to 30k per year it would be worth it, but you probably should've applied to some other T30's.

TheZoid
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Re: latest doom and gloom NYT article on law school prospects

Postby TheZoid » Fri Mar 23, 2012 4:57 pm

NoJob wrote:"However, after the initital hardship of paying your loans off, there is the potential to make some money down the road."

If one doesn't get biglaw right out of law school, it is extremely unlikely that any new lawyer can earn enough to make payments that are big enough to lower the actual principal on a 160k loan.


RC fail. I didn't say you can hang a shingle and make 200K. I said that, after some years of paying your dues, the potential is there.

ryemanhattan
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Re: latest doom and gloom NYT article on law school prospects

Postby ryemanhattan » Fri Mar 23, 2012 5:11 pm

lawlcat4179 wrote:
But looking at your profile, you non NU options don't look the greatest. Maybe if you could negotiate WUSTL up to 30k per year it would be worth it, but you probably should've applied to some other T30's.


2.9 LSAC GPA. Hard to get a lot of $$$ as a splitter. WUSTL (20k/yr), Boulder($?) and UC Irvine (12k/year) are my best options under $175k debt. Still dunno what's happening from Davis and Hastings but they are not going to offer me enough $$ (if any) to make it worth my while.

09042014
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Re: latest doom and gloom NYT article on law school prospects

Postby 09042014 » Fri Mar 23, 2012 5:17 pm

lawlcat4179 wrote:What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw.


Unless you flame out of big law in under 2 years I really doubt this is true.

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Re: latest doom and gloom NYT article on law school prospects

Postby 20160810 » Fri Mar 23, 2012 5:21 pm

Desert Fox wrote:
lawlcat4179 wrote:What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw.


Unless you flame out of big law in under 2 years I really doubt this is true.

Isn't the average like 2-3 years?

09042014
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Re: latest doom and gloom NYT article on law school prospects

Postby 09042014 » Fri Mar 23, 2012 5:29 pm

SBL wrote:
Desert Fox wrote:
lawlcat4179 wrote:What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw.


Unless you flame out of big law in under 2 years I really doubt this is true.

Isn't the average like 2-3 years?


I hear average is about 3. If you get laid off before 2 years you really fucked up and nobody is going to hire you. After 3 years your options to exit really open up. Which is why so many bail out then.

They don't start up or out til after 5-6 years from what I can tell, which is entirely second hand info. So obv. take it with a grain of salt.

So it appears to me, that someone doing decent work, and wants to stay in, can get about 5 years. Obviously, there is a risk you get a partner who hates your guts for no good reason.

Anyone who knows better can tell me where I'm wrong.

lawlcat4179
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Re: latest doom and gloom NYT article on law school prospects

Postby lawlcat4179 » Fri Mar 23, 2012 5:35 pm

Desert Fox wrote:
lawlcat4179 wrote:What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw.


Unless you flame out of big law in under 2 years I really doubt this is true.


I'm basing it off of a huge scholly at a T30 that would leave you with about 50-70k in debt. Basically, if he could get WUSTL to up the scholly to 90k over 3 years.

If you go into shitlaw, isn't it pretty realistic to think that at year 10 you are making roughly 100k? Also, the money made from shitlaw could go into savings, which would be earning you interest, instead of the other way around. Also, I was basing it off of a 4 year exit from biglaw.

I guess the point that I'm trying to make is that, even if you wind up in shitlaw, you won't be in that much different of financial shape than going into biglaw debt peonage for 4 years to break even, then starting your career.

Once you figure into the equation such things as cost of living differences (assuming shitlaw is in a lower COL area), and the increased taxation that someone in biglaw would be making, the difference between the two becomes even more pronounced.

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Flash
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Re: latest doom and gloom NYT article on law school prospects

Postby Flash » Fri Mar 23, 2012 5:36 pm

Desert Fox wrote:
SBL wrote:
Desert Fox wrote:
lawlcat4179 wrote:What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw.


Unless you flame out of big law in under 2 years I really doubt this is true.

Isn't the average like 2-3 years?


I hear average is about 3. If you get laid off before 2 years you really fucked up and nobody is going to hire you. After 3 years your options to exit really open up. Which is why so many bail out then.

They don't start up or out til after 5-6 years from what I can tell, which is entirely second hand info. So obv. take it with a grain of salt.

So it appears to me, that someone doing decent work, and wants to stay in, can get about 5 years. Obviously, there is a risk you get a partner who hates your guts for no good reason.

Anyone who knows better can tell me where I'm wrong.

A friend of mine who is a 2nd year at K&E says he gets headhunter calls at least once a day.

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Re: latest doom and gloom NYT article on law school prospects

Postby drdolittle » Fri Mar 23, 2012 5:43 pm

ryemanhattan wrote:But I love this country, and I don't want to run. The idea of not spending much money on health care or education for the rest of my life, however, is compelling. We are in decline, yes. But I'd rather stay and try and help this country function than take off just because I have an out.

My hat's off, Sir. You're a real American hero (ignoring the decline comment). With your help, we'll make it through this rough patch after all. Just don't leave. 8)

Seriously, it sounds like you still have a lot of thinking to do about whether you actually want to become a lawyer given the current realities of the legal biz. And your comments suggest you'd be happier owning a biz anywhere than being a lawyer here anyway. A career in law is almost the exact opposite of the good life you're apparently leading now.

Also, I just wanted to add that these NY Times articles and similar criticisms, while largely ignoring the successful end of the spectrum to make a stronger point, aren't potshots (or "hit pieces"). Sure there're perhaps many exceptions, but I do think the articles accurately give a sense of the general state of law schools and the legal profession today.

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Re: latest doom and gloom NYT article on law school prospects

Postby bk1 » Fri Mar 23, 2012 6:11 pm

Desert Fox wrote:I hear average is about 3. If you get laid off before 2 years you really fucked up and nobody is going to hire you. After 3 years your options to exit really open up. Which is why so many bail out then.

They don't start up or out til after 5-6 years from what I can tell, which is entirely second hand info. So obv. take it with a grain of salt.

So it appears to me, that someone doing decent work, and wants to stay in, can get about 5 years. Obviously, there is a risk you get a partner who hates your guts for no good reason.

Anyone who knows better can tell me where I'm wrong.


2007 article says 80% are out by year 5 according to NALP.

Still can't find the 3 year median number on Google.

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Re: latest doom and gloom NYT article on law school prospects

Postby t14fanboy » Fri Mar 23, 2012 6:17 pm

lawlcat4179 wrote:
Desert Fox wrote:
lawlcat4179 wrote:What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw.


Unless you flame out of big law in under 2 years I really doubt this is true.


I'm basing it off of a huge scholly at a T30 that would leave you with about 50-70k in debt. Basically, if he could get WUSTL to up the scholly to 90k over 3 years.

If you go into shitlaw, isn't it pretty realistic to think that at year 10 you are making roughly 100k? Also, the money made from shitlaw could go into savings, which would be earning you interest, instead of the other way around. Also, I was basing it off of a 4 year exit from biglaw.

I guess the point that I'm trying to make is that, even if you wind up in shitlaw, you won't be in that much different of financial shape than going into biglaw debt peonage for 4 years to break even, then starting your career.

Once you figure into the equation such things as cost of living differences (assuming shitlaw is in a lower COL area), and the increased taxation that someone in biglaw would be making, the difference between the two becomes even more pronounced.


LOL.

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Re: latest doom and gloom NYT article on law school prospects

Postby dixiecupdrinking » Fri Mar 23, 2012 6:50 pm

Don't go to law school to be rich. If you end up capable of comfortably paying your debts and living a reasonably comfortable life, will you be satisfied? I really think that is a reasonable ceiling for 95% of law students. Don't expect more.

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rayiner
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Re: latest doom and gloom NYT article on law school prospects

Postby rayiner » Fri Mar 23, 2012 7:04 pm

ryemanhattan wrote:Personally, I'm having a hard time making the numbers work. Northwestern is a great school... that will put me a quarter million dollars in debt. If we calculate interest at 7%, that's a bit more than 20k/ year to start with. Even if can count on a starting salary of $160k how the hell does this make any financial sense? It will take me a decade of law school and then 70 hour weeks to break even. Even in the best case scenario (7% interest is a bit kind and BigLaw isn't a certainty, even out of NU) I look at this as voluntarily entering a life of indentured servitude.


For the typical person, who graduates from NU, gets big law, flames out after three years and down-shifts into a corporate job, the investment is still worthwhile. What would be your career trajectory without going to law school? Even most college-educated people will never earn more than $100k without some sort of graduate degree, especially the typical law school applicant who doesn't have an engineering degree. $20k/year in interest is a lot, but the typical law school applicant is going to earn more than $20k/year more post-JD than he would have without the degree.

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Re: latest doom and gloom NYT article on law school prospects

Postby rayiner » Fri Mar 23, 2012 7:12 pm

TheZoid wrote:I'm not trying to pretend that the legal market is good by any means or that attending TTTs at sticker (or at all) is a good idea, but I feel like some of the law school gloom and doom might be a little short-sighted. Yes, attending at sticker is risky given that not all T-14 grads are biglaw secure, and if you miss biglaw it might not be pretty. However, after the initital hardship of paying your loans off, there is the potential to make some money down the road. There are plenty of private practice lawyers making 2-300K out there (and some more), which I think most people can agree is a good living. If you really want to be a lawyer and plan on being in it for the long haul, I really think you should go to NU.

tl;dr after ten years of misery struggling to pay your loans back, your life might be halfway enjoyable


The 25th/75th in-house salaries for an attorney with 4-9 years of experience are about $100k-$185k: http://www.roberthalflegal.com/salarycenter (download the PDF and go to page 13). Adjusted for a big city (say 22% for Chicago), the range is $120k-$225k. These jobs are achievable after graduating from a T14 and going to a respectable firm. Salaries in these jobs are still increasing at a reasonable rate, considering salaries in the rest of the economy have completely stagnated.

There is a glut of experienced lawyers in the field, no doubt, but the glut of lawyers with big law experience is relatively smaller (at least as the massive recession layoffs fade into the past) compared to the enormous glut of law school graduates who never end up working at a big firm.

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Re: latest doom and gloom NYT article on law school prospects

Postby rayiner » Fri Mar 23, 2012 7:31 pm

SBL wrote:
Desert Fox wrote:
lawlcat4179 wrote:What I think you'll find is that if you have less debt and go into shitlaw after law school, 10 years down the road you will be in a better financial position than if you went to NU and landed biglaw.


Unless you flame out of big law in under 2 years I really doubt this is true.

Isn't the average like 2-3 years?


Attrition rates of 15-20% are common at big NYC firms, which translates into a "half life" of about 3 years. That said, a lot of the attrition at the three year mark is voluntary. Six-figure jobs outside of a firm start opening up and looking more attractive. Up-or-out doesn't, in normal circumstances, start until after your fifth year. Mid-levels (3rd/4th/5th years) are the most profitable associates at a firm,[1] it makes no economic sense for a firm to push these folks out and replace them with a bunch of first-years. If CSM, S&C, etc, could cut in half the number of first years they had to bring on because people were staying to year five, they'd be ecstatic.

[1] Say the fixed cost for an associate is $100k (overhead). Even if a mid-level makes twice as much as a first-year in salary and bonus, their actual cost is only 50% higher. Meanwhile, they bill out for maybe twice as much and the firm collects on a much higher %-age of those hours.




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