Wow, a lot of action on this thread last night. Ssushi, you are generally right about the fact that if you compare two years of biglaw pay with two years of pre-law school pay, the biglaw pay will always result in a positive in salary.
That was never the argument I was making. I was simply responding to your argument that you can't see why anyone would clerk for two years before deciding on law school. The reasons are multi-fold. Regarding the pre-law school salary, you will still make about 50k and no, you won't be saving it all, but you'll be able to tuck a little away. My point remains that if you are concerned about immediate funds - i.e., paying for you're brothers college or helping you're parents pay their mortgage, immediate income is better than income three years down the road, even if that post-law school income is 3X as high given that you'll like have significant debt service payments and being living in a high cost city to obtain that 3X as high salary. The more persuasive aspect of clerking (in my opinion), is that you get to see what being a biglaw lawyer is about. You see the sacrifices that attorneys make for the 160k salary. Of course many former clerks go on to law school and to become biglaw associates. However, many don't - they see that it isn't worth it to them.
I never said i don't understand why ANYONE would clerk, I'm simply saying there is a cost to choosing that option as well. A lot of the posts i ran across basically seemed to say "Take a year off, the legal field will be there when you get back" as if there is no downside to taking a year or two off. I get that some people may not know if law is for them and I'm sure there are significant benefits for a lot of people who can raise their LSAT, but i think if we are in the business of making recommendations and doling out advice it would be best to give a full picture of not only the benefits but the costs. I know many of you think it's insignificant but the possibility of earning 230k more early in your career seems like a pretty big deal to me. Especially when you consider what you could so with 230k early in your career, like paying down debt before interest becomes a real problem, or saving and investing it. All other things equal i think you could be looking at a significant amount of money if you simply chose to invest that money long term.
I'm just don't think the opportunity costs are so trivial that they don't deserve a place in this discussion.
Another important factor is the average length of time in biglaw. I am not sure if you know this or not, but biglaw associates don't begin their careers at 160k and then make an upward trajectory for the rest of their careers like most other fields. If you can handle the time demands of biglaw, are actually a good attorney then perhaps this is true - for the most part, it is true for about 10% of each entering 1st year associate class. The rest of the associate class leave biglaw - most for long term stable careers (many that still are legal in nature) that pay less. Over 50% of associates are gone by year 5. Pretty much anyone can last 5 years if you are resolute in making the firm your life - i.e., you won't get fired. After that, many are forced out. My point with this lengthy discussion is that you aren't necessarily going to be "missing out" on two extra years of salary. Will you likely make more after your transition from biglaw to another career than what you would make a pre-law school college graduate, I would certainly think so. Not everyone of course because plenty of ex-biglaw associates go back to school or join other careers (i.e., they become teachers, small business owners, real estate brokers, etc..). Whether you start two years later in biglaw likely isn't going to change the amount of money you make in biglaw, it just delays the finite amount of time you have by two years. Yes, you could be the 10%, but I would argue that to plan on that is about as likley as planning on the fact that you'll be the top 10% of your law school class.
Well yea I'm looking at it over a finite amount of time, but the bottom line is that if you work the same amount of time over the course of your career, one scenario will leave you will more money at the end than the other, and while 230k or 100k is most likely trivial in the long term, it becomes much more important when you consider what could be done if you invest it while young or the problems that could be avoided by aggressively paying down debt with that money.
Note - I haven't even gotten into a discussion of debt service payments. FYI: at about $150k in debt, my debt payments were about $1800 a month (and I have 50% of private loans at about 2% right now, which most students apparently lean towards the grad plus loans that are at 7,9%). If you decide to go to NYC (or any high cost city), then you are only looking at take home pay of about $90k. 20k of that will be debt service (minimum payments only), about $25k will be rent (figure $2k a year), you'll need to buy a wardrobe and furniture for an apartment - probably about $3-4k a year, you'll probably want to take vacations, that will be another 3k minimum, you'll go out with friends for brunch/dinners (not lavish dinners, just regular dinners) which is very expensive. My point here, is that 0Ls think that 160k is SO MUCH MONEY. It isn't. Especially not if you want to pay back your student debt as soon as possible. For 150k, I am going to need close to 5 years to pay it back. So after 5 years of biglaw, I'll be in the same financial spot as if I had never went to law school. Great. Had I been better informed, I may not have chosen this route.
Eh, i see debt as a sunk cost. If you start law school 2 weeks early or if you start law school after a 10 year break, the debt will be there. I'm willing to bet that whatever you save by not having to take out as many loans will be negated by the increasing price of tuition.