PSA for 0Ls: NU's AJD Program Could Save you ~200k Forum

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kcdc1

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Tue Oct 14, 2014 5:44 pm

bananatopia wrote:1.) After taking out taxes you'll have about 98k extra from your first year salary. Also, graduating a year early doesn't mean that you don't have to keep yourself alive for that year, so subtracting bare bones living expenses (for a single in Chicago maybe 20k), you have 78k.

2.) This only matters if you actually land a biglaw position. If you don't you'll just be screwed one year sooner and then partially unscrewed one year sooner after your loans are forgiven two decades later. Attempting to factor out PI/Gov self selection, people who want biglaw at NU have maybe 70% chance of landing it. So factoring in the odds that your extra year actually matters 78k*0.7=54.6k

3.) This assumes that the amount of time you spend as an associate in biglaw is essentially a function of age (i.e. "I'm planning to work in biglaw until I turn 35.") rather than a constant (i.e. "Realistically I'll probably only last 4 years in biglaw." or "I'll work in a large firm until my debt is paid off, and then lateral to much lower paying, but higher satisfaction legal work."). Since you don't have full control over your career such that you can spend exactly as many years as you'd like working for a large firm, you have to factor out some fraction of the above 54.6k to account for the odds that your firm "encourages" you to find employment elsewhere (almost certainly at a much lower salary) after a given number of years. I would argue to factor out 50%, since that reflects how much control you have, in theory, over your job, since continued employment is always an "and" function of your desire to remain and your employer's desire to retain you.

4.) The above advantage has to be converted into scholarship dollars in order to help you make actual decisions on which school to attend. Each dollar in scholarships/lower tuition is worth about $1.25 in debt at graduation. So the advantage has erroded to 21.8K.

You'll also borrow about 20k less for living expenses (before accrued interest), since you only have to borrow for living expenses for two years rather than three years, so the final total comes to a ≈42k advantage (in scholarship dollars) for NU AJD over 3 years at NU. Make decisions using that estimate rather than "Assuming equal financial help, at any given point past graduation, you will be about 100k-200k ahead of where you would have been in a 3-year program."
Responses:

(1) Yes, after taxes, you earn about 100k your first year in biglaw. No, you should not subtract living expenses from the savings calculation. You have to pay for food and housing either working or as a student. If anything, living expenses increase the financial advantage of the AJD program because you're not financing your third year of living expenses with loans.

(2) There are law school applicants that can reasonably expect to get biglaw. People can discount their own likelihood as they see fit. If you are planning to go PI and use public service loan forgiveness, the AJD program will not benefit you as much financially.

(3) If you stay in biglaw long-term, the benefit of graduating a year early is much greater than 200k. You're a year ahead in compensation every year -- this includes making partner a year earlier. If you assume 3 years of biglaw --> IH, then the difference is that the AJD starts the IH position sooner. So the compensation difference is equal to starting IH salary plus higher compensation each year thereafter in the form of salary increases. Unless you take an IH job where your compensation maxes out soon after starting, you're still talking about a substantial financial reward for starting a year early.

(4) I'm imagining that the $1.25 figure is calculated from some mix of interest and inflation (2018 dollars earned will be worth less than 2015 dollars paid). Some adjustment here is appropriate. I don't know what that factor is, but it will be less for the AJD program because, as a 2-year program, less interest and inflation will occur.

(5) You didn't factor in interest savings. Using very rough calculations:

Assuming full $165k tuition + 20k per year living expenses, and 25k in SA compensation, where the expenses are fully financed by loans at a 6.2% interest rate, an AJD graduates with about 200k in debt whereas a 3-year student graduates with about 230k in debt. The ~30k principle difference is just where you stand at graduation. Factor in faster repayment and interest on the principle difference over the duration of the loan, and the difference grows considerably.

bananatopia

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by bananatopia » Tue Oct 14, 2014 9:31 pm

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Last edited by bananatopia on Sun Jun 14, 2015 12:56 am, edited 1 time in total.

kcdc1

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Wed Oct 15, 2014 11:18 am

With respect to the above comment, I agree that it in most cases, it would be unwise to turn down 100k at Duke to pay full tuition as an AJD. (NU tends to be generous with $$, so this scenario is unlikely to actually arise.) We could quibble about projecting expected return, but I'll just concede that the risk profile doesn't make sense. We should also bear in mind that the value of graduating a year early will depend greatly on an individual's circumstances and aspirations.

But I will stand by the subject line which states only that the program could save an applicant ~200k. For example, if you are coming in IP-secure and plan to make a career at a market-paying boutique with excellent partnership prospects, ~200k might actually be a conservative estimate.

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Mon Oct 20, 2014 7:34 pm

Bumping for new LSAT scores. If you have WE and scored at or above 168, you have an excellent chance of admission/tuition discount. Stronger WE can compensate for lower scores. Still taking questions if you have them.

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by captainplanet » Wed Nov 05, 2014 8:41 pm

kcdc1 wrote:Bumping for new LSAT scores. If you have WE and scored at or above 168, you have an excellent chance of admission/tuition discount. Stronger WE can compensate for lower scores. Still taking questions if you have them.
Just saw this, thanks for putting this great thread together (aside from that weird math tangent you were forced to go on)! I'm also a current AJD student (graduating this year), and happy to answer any questions

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bl1nds1ght

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by bl1nds1ght » Wed Nov 12, 2014 2:43 pm

captainplanet wrote:
kcdc1 wrote:Bumping for new LSAT scores. If you have WE and scored at or above 168, you have an excellent chance of admission/tuition discount. Stronger WE can compensate for lower scores. Still taking questions if you have them.
Just saw this, thanks for putting this great thread together (aside from that weird math tangent you were forced to go on)! I'm also a current AJD student (graduating this year), and happy to answer any questions
Congratulations! I am sure that you are happy to be so close to finishing.

What were your impressions of the AJD OCI / job search? Were firms pretty receptive? Did they view the program as being substantially different from the traditional 3 year program?

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by captainplanet » Wed Nov 12, 2014 5:09 pm

bl1nds1ght wrote:
captainplanet wrote:
kcdc1 wrote:Bumping for new LSAT scores. If you have WE and scored at or above 168, you have an excellent chance of admission/tuition discount. Stronger WE can compensate for lower scores. Still taking questions if you have them.
Just saw this, thanks for putting this great thread together (aside from that weird math tangent you were forced to go on)! I'm also a current AJD student (graduating this year), and happy to answer any questions
Congratulations! I am sure that you are happy to be so close to finishing.

What were your impressions of the AJD OCI / job search? Were firms pretty receptive? Did they view the program as being substantially different from the traditional 3 year program?
A lot of firms at OCI are familiar with the AJD program already, and those that don't know as much about it are usually impressed that we do 3 years of work in 2 years, so firms tend to be pretty receptive. It's a little harder if you're mailing out resumes because non-OCI firms are less likely to know about the program, so we just have to include a short blurb in our cover letter explaining it. I don't think that firms see it as being that different, since we're taking the same classes, but just doing it in 5 semesters instead of 6. If you put a positive spin on the program and talk about how it's geared for law students with a lot of work experience, it's usually received well, especially since so many people think the 3rd year of law school is a waste anyway. I have heard anecdotal evidence that there may be some firms in more traditional regions that may not be as receptive to the program, but it hasn't really been an issue for most people.

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by bl1nds1ght » Wed Nov 12, 2014 5:18 pm

captainplanet wrote:
bl1nds1ght wrote: What were your impressions of the AJD OCI / job search? Were firms pretty receptive? Did they view the program as being substantially different from the traditional 3 year program?
A lot of firms at OCI are familiar with the AJD program already, and those that don't know as much about it are usually impressed that we do 3 years of work in 2 years, so firms tend to be pretty receptive. It's a little harder if you're mailing out resumes because non-OCI firms are less likely to know about the program, so we just have to include a short blurb in our cover letter explaining it. I don't think that firms see it as being that different, since we're taking the same classes, but just doing it in 5 semesters instead of 6. If you put a positive spin on the program and talk about how it's geared for law students with a lot of work experience, it's usually received well, especially since so many people think the 3rd year of law school is a waste anyway. I have heard anecdotal evidence that there may be some firms in more traditional regions that may not be as receptive to the program, but it hasn't really been an issue for most people.
Thanks for that reply.

Not to be too personal, but are you satisfied with your prospects/outcome? How do your AJD classmates feel?

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by captainplanet » Wed Nov 12, 2014 6:11 pm

bl1nds1ght wrote:
captainplanet wrote:
bl1nds1ght wrote: What were your impressions of the AJD OCI / job search? Were firms pretty receptive? Did they view the program as being substantially different from the traditional 3 year program?
A lot of firms at OCI are familiar with the AJD program already, and those that don't know as much about it are usually impressed that we do 3 years of work in 2 years, so firms tend to be pretty receptive. It's a little harder if you're mailing out resumes because non-OCI firms are less likely to know about the program, so we just have to include a short blurb in our cover letter explaining it. I don't think that firms see it as being that different, since we're taking the same classes, but just doing it in 5 semesters instead of 6. If you put a positive spin on the program and talk about how it's geared for law students with a lot of work experience, it's usually received well, especially since so many people think the 3rd year of law school is a waste anyway. I have heard anecdotal evidence that there may be some firms in more traditional regions that may not be as receptive to the program, but it hasn't really been an issue for most people.
Thanks for that reply.

Not to be too personal, but are you satisfied with your prospects/outcome? How do your AJD classmates feel?
I'm very happy that I came to Northwestern and that I did the AJD program. I was 27 when I started law school and I was worried about being in a different stage of life than many of my law school peers who had graduated from undergrad schools not that long ago. So I really felt at home in the AJD program. Most people are in their late 20s (though ages range from early 20s to 40s or older in the program too).

Our job outcomes are comparable to 3-year students at NU, so I think that most people are happy. Not everyone found a job at OCI, but most people did, including me. NU does a good job of making sure that AJD students have access to all the same things that 3-year students do, so that helps too. But are there some people who have had a negative experience here? Yes. Kcdc1 gave a good breakdown of the upsides and downsides of the program in his original post. I would say that it's a great option for someone who has a few years of work experience and knows what type of law he or she wants to do. And it may not be the best option for someone who isn't sure what they want to do and might benefit from having 3 years to figure it out, or someone who struggles with time management and might have a hard time juggling the extra load. And if you are someone who definitely wants to do law review and clerk, it is definitely doable from the AJD program, but fewer of us get on law review (compared to the 3-year students), and we have 1 semester less of grades than other clerkship applicants when we apply, so it's something to consider.

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kcdc1

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Fri Nov 14, 2014 1:25 pm

To briefly add onto the above comment, while it's true that fewer AJDs participate in law review and clerking, there is likely significant self-selection at work in that trend. The AJD crowd tends to pick the program because it's the most efficient way to get back into the work force and earning money again. Clerking is not the most attractive option given that mindset. And regarding law review, OCI hits before the write-on competition, so many AJDs see no reason to write on.

If you are interested in those options, the law review factor is unpredictable. Being an AJD could help if most of your classmates don't enter the competition. The clerkship application issue may be an actual disadvantage -- at least for the most prestigious/competitive positions.

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Mon Dec 01, 2014 10:32 am

December. By this time next year, you could have your job lined up and be 40% finished with law school. Or you could do a 3-year program and be stressing about your first semester of law exams.

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Mon Dec 29, 2014 6:39 pm

Another bump with December LSATs due out this week.

FWIW, I took the December LSAT and applied without interviewing, and was admitted a month after scores were released. I can also confirm that NU is splitter friendly -- if you score at median (168) or higher, you have an excellent chance to get a significant tuition discount. I was a super-splitter, and NU offered me cheaper tuition than schools ~10 ranks lower.

Also, 2 years so much better than 3. I'm anxious to get into practice as-is. I would be banging my head into a wall right now if I had 2.5 years left of school.

Happy to take questions about the program or offer application advice. Happy holidays.

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Thu Jan 01, 2015 8:24 pm

Dec LSAT scores finally released. Last bump for the year, but I'm sure there will be a Q&A thread posted around when decisions are being made.

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impalpable

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by impalpable » Tue Mar 10, 2015 2:11 am

Can 0Ls for 2yr JD program also check in this thread? :mrgreen:

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by bearsfan23 » Tue Mar 10, 2015 2:58 am

This is a really bad thread. OP has to be an NU adcomm.

I want to give a substantive response to why NU's AJD doesn't save you $200k, but its pretty obvious reason isn't going to work here. OP's math is so ridiculous it really doesn't even warrant correcting.

What OP is doing here is every bit as bad as adcomms from T3 and T4 schools who send misleading emails to prospective law students. He's just flat out lying about the benefits. Hopefully no 0Ls fall for this

If you want to do NU's 2 year AJD program, fine. But to think its a ridiculous savings on its face is just wrong

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Re: PSA for 0Ls: NU's AJD Program Could Save you ~200k

Post by kcdc1 » Tue Mar 10, 2015 6:10 pm

bearsfan23 wrote:This is a really bad thread. OP has to be an NU adcomm.

I want to give a substantive response to why NU's AJD doesn't save you $200k, but its pretty obvious reason isn't going to work here. OP's math is so ridiculous it really doesn't even warrant correcting.

What OP is doing here is every bit as bad as adcomms from T3 and T4 schools who send misleading emails to prospective law students. He's just flat out lying about the benefits. Hopefully no 0Ls fall for this

If you want to do NU's 2 year AJD program, fine. But to think its a ridiculous savings on its face is just wrong
With all due respect, I was just sharing the math that applies to my own situation. As an AJD, I plan to earn ~180k in my third year after matriculation (as opposed to 0) and about 10-20k more per year every year thereafter. My goal is to be in a position to retire before 50, and the extra year of earning plus the added seniority will pay out substantially more than 200k for me. Everyone's calculus will be different, but the financial benefits of getting to work a year faster are very real.

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