Another sign that ITE is almost over Forum

[DoubleChecks]

For the most part I agree with you bk, but BW's comment could also represent the idea that people shouldn't be running to the profession of law in the hopes of $$$, even if NYC biglaw is a realistic option for them.

Overall his argument can be taken that way, but he made a very specific point about people with lots of debt and said that NYC biglaw is not a good deal for them. Maybe his and my definition of "good deal" differs as mine happens to be, when you are in massive debt, whatever will get you out of debt fastest even if it is miserable.

No you're probably right in that BW's post implies that he was just talking about NYC biglaw specifically...but another element of his post is how posters treat NYC biglaw as the "holy grail" (dont know posters do treat it as that or not imo) when it is actually quite, as you said, miserable.

[Big Shrimpin]

I make market salary and that leaves me with about $7k/month after taxes. My rent is $2k (which is a pretty good deal here and I don't know too many people who are paying less than I do unless they have roommates), my debt service on $150k in loans is about $2k a month - THAT IS THE MINIMUM PAYMENT - which leaves about $4k of discretionary spending. Sure I've been making more than the minimum,s but I am still at about $100k in debt after 2.5 years in biglaw

Could you elaborate on $7k/month after taxes? Isn't 160 in NYC after NYC taxes like 95-96k? So the additional 11-12k goes to insurance and stuff (that you mentioned but I didn't quote)? Yikes. Is most of that 401k?

So on 84k/year after taxes (which is like better than a vast majority of people in the world), you're paying 2k/mo for loans, 2k/mo for rent, which leaves 36k discretionary spending/year. Are you saving that? Is it not possible to live on a discretionary budget of like 20k after taxes/rent/loans? I live in DC on like 8-10k discretionary after rent (still in school), and that's PLENTY of money for me to eat lunch out almost every day and go out to dinner once a week/go to bars on weekends. I'd assume the conversion ratio for NYC:DC is like 3:2, so is 15k (ish) not realistic for discretionary expenses? Rounding up an additional 4-5k to 20k?

As an aside, you've only paid-down 50k on 150k principal in 2.5 years? Why? I can see how 25k/year (roughly, but if we're going to add a factor-in for interest capitalization, let's assume you've paid a few thousand more than that...150k at 6ish% adds about 9 to the principal for first year, 6 for second year, etc...) for 2.5 years is about 75k, but with added interest capitalization, doesn't that get you closer to like a 85-90k principal after 2.5 years? Was it not possible to throw an additional 16k/year towards it, at almost 40k repayment a year? Or if you'd limited 401k investment, even more? A rough calculation then would put the principal after 2.5 years closer to like 60-70ish.

I mean no disrespect here. I'm asking out of pure curiosity, since I'll likely be in a similar position. I did most of these calculations in my head, as I've been thinking about this sht nonstop for the past three days, so hopefully I haven't fcked up the numbers too bad.

Thank you in advance for your insights, brother.

Edit: didn't factor-in lockstep salary/bonuses...so an additional 50-60k pretax income over 3 years.

[TatteredDignity]

ITT: Folks debate whether we're returning to an economy that even then wasn't creating enough legal jobs for even half the law students graduating each year.

[09042014]

ITT: Folks debate whether we're returning to an economy that even then wasn't creating enough legal jobs for even half the law students graduating each year.

Because it doesn't matter unless EVERYONE gets a jerb.

[Sup Kid]

I make market salary and that leaves me with about $7k/month after taxes. My rent is $2k (which is a pretty good deal here and I don't know too many people who are paying less than I do unless they have roommates), my debt service on $150k in loans is about $2k a month - THAT IS THE MINIMUM PAYMENT - which leaves about $4k of discretionary spending. Sure I've been making more than the minimum,s but I am still at about $100k in debt after 2.5 years in biglaw

Could you elaborate on $7k/month after taxes? Isn't 160 in NYC after NYC taxes like 95-96k? So the additional 11-12k goes to insurance and stuff (that you mentioned but I didn't quote)? Yikes. Is most of that 401k?

So on 84k/year after taxes (which is like better than a vast majority of people in the world), you're paying 2k/mo for loans, 2k/mo for rent, which leaves 36k discretionary spending/year. Are you saving that? Is it not possible to live on a discretionary budget of like 20k after taxes/rent/loans? I live in DC on like 8-10k discretionary after rent (still in school), and that's PLENTY of money for me to eat lunch out almost every day and go out to dinner once a week/go to bars on weekends. I'd assume the conversion ratio for NYC:DC is like 3:2, so is 15k (ish) not realistic for discretionary expenses? Rounding up an additional 4-5k to 20k?

As an aside, you've only paid-down 50k on 150k principal in 2.5 years? Why? I can see how 25k/year (roughly, but if we're going to add a factor-in for interest capitalization, let's assume you've paid a few thousand more than that...150k at 6ish% adds about 9 to the principal for first year, 6 for second year, etc...) for 2.5 years is about 75k, but with added interest capitalization, doesn't that get you closer to like a 85-90k principal after 2.5 years? Was it not possible to throw an additional 16k/year towards it, at almost 40k repayment a year? Or if you'd limited 401k investment, even more? A rough calculation then would put the principal after 2.5 years closer to like 60-70ish.

I mean no disrespect here. I'm asking out of pure curiosity, since I'll likely be in a similar position. I did most of these calculations in my head, as I've been thinking about this sht nonstop for the past three days, so hopefully I haven't fcked up the numbers too bad.

Thank you in advance for your insights, brother.

Edit: didn't factor-in lockstep salary/bonuses...so an additional 50-60k pretax income over 3 years.

^^ This was going to be my exact post. Some clarification would be helpful (especially as to how $96k went to $84k, if it was mostly expenses or mostly retirement investments). Thanks.

[BruceWayne]

Other than the person probably shouldn't have gone into so much debt, I'd argue that a secondary market (or a branch office of a firm located in a major market) with low state taxes is about as good as you're going to get in terms of pure $$$.

But these jobs are insanely less plentiful compared to NYC biglaw and this presumes one has connections to these areas in order to make these kinds of jobs even a possibility.

The problem with BruceWayne's argument is that NYC biglaw is probably the most plentiful source of jobs for graduates who are trying to pay down $200k in a hurry. Sure, we'd all like to work somewhere where the taxes are lower and the billables are less, but that isn't a realistic option.

This is way overplayed argument on here that gets passed around a lot because it's part of TLS culture.

First, the problem with this argument its that it rests on a pretty ridiculous, although strangely pretty accepted TLS assumption: that everyone--or even most--is from NYC, DC, or California and not from a "secondary" location. Last time I checked a lot of people live in, or are from, areas outside of NYC , California, and DC (contrary to what this website would have you believe). Thus a lot of people do in fact have ties to "secondary markets". If you attend one of the top 14 and are from a secondary market getting a firm job in one of these markets is an attainable goal. If you're from one of these secondary markets living/working there is a very realistic goal. On top of that even if you don't go to a top 14 if you go to a local school in one of these areas on low debt it's still not a bad option (SMU in Dallas, UGA in Georgia, etc.).

Second, why do you think it's a good idea to go work in a firm in NYC (the location most noted for the up or out scheme and the locale where you are going to have the hardest time paying off 200K debt is such a good idea)?

Finally it may make many cringe, but depending on your school's LRAP, in conjunction with IBR public interest work is often a better idea financially. Sure the gross isn't as high as NYC biglaw, but when you factor in no loan payments (because of LRAP's and IBR), much lower taxes, and the ability to live in a lower COL area and that PI jobs aren't working you like a slave it can be a very smart route. Particularly since PSLF will waive it off after 10 years. And people need to stop with the "PI is only hiring HYS grads and is even more competitive than Biglaw bullshit". Clearly that might be (somewhat) true for PI work like DOJ or the ACLU or whatever, but for many PI fields that's not what they are making hiring decisions off of. That's another product of the TLS group think mindset.

[Big Shrimpin]

For some, OCI only yielded NYC.

[bk1]

This is way overplayed argument on here that gets passed around a lot because it's part of TLS culture.

First, the problem with this argument its that it rests on a pretty ridiculous, although strangely pretty accepted TLS assumption: that everyone--or even most--is from NYC, DC, or California and not from a "secondary" location. Last time I checked a lot of people live in, or are from, areas outside of NYC , California, and DC (contrary to what this website would have you believe). Thus a lot of people do in fact have ties to "secondary markets". If you attend one of the top 14 and are from a secondary market getting a firm job in one of these markets is an attainable goal. If you're from one of these secondary markets living/working there is a very realistic goal. On top of that even if you don't go to a top 14 if you go to a local school in one of these areas on low debt it's still not a bad option (SMU in Dallas, UGA in Georgia, etc.).

Second, why do you think it's a good idea to go work in a firm in NYC (the location most noted for the up or out scheme and the locale where you are going to have the hardest time paying off 200K debt is such a good idea)?

Finally it may make many cringe, but depending on your school's LRAP, in conjunction with IBR public interest work is often a better idea financially. Sure the gross isn't as high as NYC biglaw, but when you factor in no loan payments (because of LRAP's and IBR), much lower taxes, and the ability to live in a lower COL area and that PI jobs aren't working you like a slave it can be a very smart route. Particularly since PSLF will waive it off after 10 years. And people need to stop with the "PI is only hiring HYS grads and is even more competitive than Biglaw bullshit". Clearly that might be (somewhat) true for PI work like DOJ or the ACLU or whatever, but for many PI fields that's not what they are making hiring decisions off of. That's another product of the TLS group think mindset.

People are from secondary markets, but those markets are small. I just don't think it's going to be easier to go back to where you came from compared to getting NYC. I'm not saying it's impossible, I'm saying that NYC is easier. It's a good idea to work in NYC because the jobs are more plentiful and thus you have a higher chance of actually landing one. It's a good idea simply because it has the highest chance of paying back your loans quickly.

As for PI, sure it's a good option for people who are committed to working in PI for 10+ years but not everyone wants to do that. It might be easier to get any LRAP qualifying job than to get biglaw, it might not be, it's hard to tell without actual aggregate data to support it one way or the other. PI jobs are less available to fresh T14 grads, though possibly or possibly not more competitive.

Also, you can't just use a QoL of life argument (less hours) to support a financial argument (LRAP/IBR > biglaw). I haven't crunched the numbers but in no way do I see LRAP being a better option than biglaw from a purely financial perspective.

[keg411]

For some, OCI only yielded NYC.

This is something that gets looked over. I'm sure a lot of people would love cool secondary markets with lower billables and a better "lifestyle" (though honestly, its arguable whether these places actually exist), but the JOBS are in NYC. People who didn't bid on NYC last year were more likely to get shut out, even with great grades. Read the thread about last year's OCI: the biggest "mistake" T14 people said they made was not bidding on NYC. Not because it's the "most awesomest place ever", but because it's where the jobs are.

[Big Shrimpin]

For some, OCI only yielded NYC.

This is something that gets looked over. I'm sure a lot of people would love cool secondary markets with lower billables and a better "lifestyle" (though honestly, its arguable whether these places actually exist), but the JOBS are in NYC. People who didn't bid on NYC last year were more likely to get shut out, even with great grades. Read the thread about last year's OCI: the biggest "mistake" T14 people said they made was not bidding on NYC. Not because it's the "most awesomest place ever", but because it's where the jobs are.

TYFT.

[alumniguy]

Overall his argument can be taken that way, but he made a very specific point about people with lots of debt and said that NYC biglaw is not a good deal for them. Maybe his and my definition of "good deal" differs as mine happens to be, when you are in massive debt, whatever will get you out of debt fastest even if it is miserable.

This is PRECISELY the issue! Many pre-law school students think that being a lawyer will lead to a nice and comfortable life, EVEN IF they have to take out $150k+ in student loans. This just isn't the case for a large percentage of law school graduates. If you are thinking about taking $150k+ in loans with the idea that you'll be able to get biglaw and pay it off, then you shouldn't be even going to law school.

There is no doubt that there are more jobs in NYC (I tried secondary markets and stuck out, yet had multiple NYC offers). I disagree with BW that secondary markets jobs aren't difficult to get. Maybe if you are T-14 (and have a compelling story as to why "X" is where you want to work) or attended a local school and did very well, secondary biglaw is obtainable. However, for the majority of students getting a job in NYC will be the easiest market - precisely because it is such a brutal market in terms of long term career prospects.

One additional point. Starting salaries in secondary markets are NOT the same as major markets. Usually firms will not be at $160 + year end bonus, and then $10k-$20k bumps thereafter. Look at senior associate salaries for say Cleveland or Minneapolis and you'll be pretty shocked to see that they make probably $100k less than their major market counterparts. Sure, the lifestyle is probably marginally better, but the real issue is that they don't need to pay that much because they have people lined up to get jobs like pay less due to variety of reasons.

So yes, it is a good deal initially to get NYC biglaw over smaller law in some other market. But few law school students realize just how quickly the MAJORITY of associates leave a firm - over 50% will be gone by your 3rd/4th year and that is pretty much guaranteed. And currently, the lateral prospects aren't that rosy.

[thecilent]

ITT: Ppl don't realize that living in nyc >>>> anywhere else

[alumniguy]

I make market salary and that leaves me with about $7k/month after taxes. My rent is $2k (which is a pretty good deal here and I don't know too many people who are paying less than I do unless they have roommates), my debt service on $150k in loans is about $2k a month - THAT IS THE MINIMUM PAYMENT - which leaves about $4k of discretionary spending. Sure I've been making more than the minimum,s but I am still at about $100k in debt after 2.5 years in biglaw

Could you elaborate on $7k/month after taxes? Isn't 160 in NYC after NYC taxes like 95-96k? So the additional 11-12k goes to insurance and stuff (that you mentioned but I didn't quote)? Yikes. Is most of that 401k?

So on 84k/year after taxes (which is like better than a vast majority of people in the world), you're paying 2k/mo for loans, 2k/mo for rent, which leaves 36k discretionary spending/year. Are you saving that? Is it not possible to live on a discretionary budget of like 20k after taxes/rent/loans? I live in DC on like 8-10k discretionary after rent (still in school), and that's PLENTY of money for me to eat lunch out almost every day and go out to dinner once a week/go to bars on weekends. I'd assume the conversion ratio for NYC:DC is like 3:2, so is 15k (ish) not realistic for discretionary expenses? Rounding up an additional 4-5k to 20k?

As an aside, you've only paid-down 50k on 150k principal in 2.5 years? Why? I can see how 25k/year (roughly, but if we're going to add a factor-in for interest capitalization, let's assume you've paid a few thousand more than that...150k at 6ish% adds about 9 to the principal for first year, 6 for second year, etc...) for 2.5 years is about 75k, but with added interest capitalization, doesn't that get you closer to like a 85-90k principal after 2.5 years? Was it not possible to throw an additional 16k/year towards it, at almost 40k repayment a year? Or if you'd limited 401k investment, even more? A rough calculation then would put the principal after 2.5 years closer to like 60-70ish.

I mean no disrespect here. I'm asking out of pure curiosity, since I'll likely be in a similar position. I did most of these calculations in my head, as I've been thinking about this sht nonstop for the past three days, so hopefully I haven't fcked up the numbers too bad.

Thank you in advance for your insights, brother.

Edit: didn't factor-in lockstep salary/bonuses...so an additional 50-60k pretax income over 3 years.

^^ This was going to be my exact post. Some clarification would be helpful (especially as to how $96k went to $84k, if it was mostly expenses or mostly retirement investments). Thanks.

Certainly can elaborate - I don't have my pay stubs in front of me though so it isn't going to be as accurate as I'd like. First, the majority of NYC firms give a salary advance prior to your start date (range is probably 5k to 15k) and once you start you pay it back - and it comes out of your after tax income. For me, I need the salary advance to live between graduation and my start date (for example, when you rent your apartment you'll need first, last and security deposit - that is some hefty change). Second, yes I do pretty much max out my 401k (in my opinion, you'd be dumb not to especially at the tax bracket you'll be in).

For the record, I went to school in Boston and lived on about $8-10k in post-housing discretionary spending. So yes, I understand how to be frugal.

OK on to the budget/repayment - yes I had approximately $84k after taxes. 48k of that was minimum loan payment and rent (my rent was actually $2100 and that doesn't include cable/internet or electricity - probably another $200 each month on average, but I won't include that in what I am paying in the above calculation). So now were down to $36k. You suggest that I live on 20k discretionary spending or $1,666.66 per month or $416 per week. I would agree that in the abstract this seems like a ton of cash. Yet, it really isn't and I couldn't do it. Although admittedly, I am NOT a budgeter - never have been and hopefully never will need to be. I simply live the way I live - I am not a penny pincher nor a spendthrift. I have a good sense of living within my means. On to the spending of the money:

1. Working in biglaw requires a business/business casual wardrobe. For me, that included a new suit (and no, not some $250 JCPenney suit because well, they look cheap and to be honest most associates wear nicer clothes and you'll want to look the look when you get to your firm), several new pairs of pants, new dress shirts, new shoes, etc... This wardrobe isn't cheap. No, I wasn't blowing my money on $1k suits, I paid $500. My shirts were all bought on clearance at Bloomingdales for about $50 each. My shoes (3 pairs) I got from discount websites at about $125 each. So there goes some of that discretionary spending. How about dry cleaning? $2 a shirt, $7 for pants. Sure you could launder and iron yourself, but when you're working until 9:30/10:00pm most nights, you'll quickly realize that you're not spending your free time in front of an ironing board. Also, your clothes expenditures, while they do decrease, you need to continually add to your wardrobe - shoes wear out, you decided you need more than just one suit, etc...

2. What about your apartment? For me, that required purchasing furniture. Sure, I could have searched craigslist for cheap furniture (I did get my bed frame for $200 bucks off there, plus a $35 cab ride) but I simply decided that I am no longer a college student. At some point I would think you're done with the futon and folding tables. For me, that was when I started my career. So conservatively lets say you spend $3k on new furniture (bed, book shelves, couch, television, dining table, chairs, etc.) For me, I've purchased a few nice items and lot of Ikea stuff. My goal is to replace the Ikea stuff by purchasing one nice piece of furniture a year. Last year it was a nice couch/sectional that was about $2500. This year, I am not sure...

3. Food/Entertainment: I eat out everyday for lunch. Yes, I could make my own lunch, but see ironing shirt issue above (I don't like making lunch and don't want to spend the time grocery shopping and preparing). So, I spend about $10 a day on lunch (although to be fair, my firm has a number of free lunch days were you have team meetings, CLEs, etc... so in all actuality, it probably averaged out to about 4 days of buying lunch a year). Weekday dinner - when not eating at the firm on the client, is about $15 for me. Again, I don't cook. Going out to dinner with friends, easily $50-$100 a pop. Going to bars is also expensive. Dating is expensive. NYC if just freaking expensive. People who don't live here just don't understand. Movie tickets $15. Museum tickets $10-$20. Broadway shows $50-$150. I'm not doing this stuff every night, but it adds up. Newspaper subscriptions, etc.

4. Vacations/Travel: I presume that you'll be going on vacations. I used all 4 weeks of vacations at my firm and pretty much every other associate does as well. Vacations are expensive. Skiing vacations $1k-$2k for a week. Trips home at the holidays to see family ($750 - $1.5k) for a week. Getting the picture? Sure, I don't HAVE to spend so much on vacations, but when you're overworked you'll likely want to go somewhere nice.

5. Other incidentals: wedding gifts, birthday and christmas gifts, etc. Again, when I was in college, I never bought these gifts because everyone knew I didn't have any money. Once you start making $160k, the "I'm poor" line seems to ring a little bit hollow. So you're going to spending money on this, for me, it was probably $1k total.

So yea, 20k discretionary seems like a lot, but here it isn't getting you anything. I have no idea how much I actually spent - probably more like 25-30k. At the end of my first year I paid off about $20k extra in loans and still had about $10k in my checking account. After my second year (I maxed out my 401k that year) I paid down closer to $30k of my loans and still have about $10k in my checking and about $10k in a rainy day savings account. If you ask me, I think I am being pretty aggressive on the early pay down compared to the few other junior associates I've talked to.


Also, salary increases/bonuses. Stub year, I got 5k, 1st year I got 7.5k, 2nd year I got 10k. Also, got 10 k salary bump my second year, 15k more my third year (my current year). This isn't 50-60k pretax, it is 30k pretax, or about 15k after tax. I do have a spring bonus coming of $10k, which I'm using to pay down more debt.

So $40k a year in debt paydown is REALLY, REALLY aggressive. I couldn't have done it. I'm not saying it isn't possible (but I would be skeptical), but in my opinion it isn't realistic. As a third year (likely $205k gross), I think $40 is a likely possibility, but certainly not as a first year making $167.5k.

[introversional]

Over for this guy:

http://online.wsj.com/article/SB1000142 ... l?mod=e2tw

[Big Shrimpin]

Thanks, alumniguy, that was a great post.

Would you say that most associates are on the 10-year repayment plan, or something more aggressive? I fully understand attrition rates, but I was wondering how most associates attack their debt load (especially those owing a substantial amount). Again, any insight is much appreciated.

[alumniguy]

Thanks, alumniguy, that was a great post.

Would you say that most associates are on the 10-year repayment plan, or something more aggressive? I fully understand attrition rates, but I was wondering how most associates attack their debt load (especially those owing a substantial amount). Again, any insight is much appreciated.

I really don't have a good sense of this. I would guess that the general feeling for those with large debt levels is to pay back as quickly as possible (with a good goal being 5 years or so). Certainly depends on a number of factors, including your appetite to live like a pauper. Again, not a budgeter here so that isn't how I really attacked it. My thought process was/continues to be that if I spend a lot one week/month, I try to reign it in the next.

[Kohinoor]

For some, OCI only yielded NYC.

With the support of family and good friends, those unfortunate souls will make it through.

[BruceWayne]

Certainly can elaborate - I don't have my pay stubs in front of me though so it isn't going to be as accurate as I'd like. First, the majority of NYC firms give a salary advance prior to your start date (range is probably 5k to 15k) and once you start you pay it back - and it comes out of your after tax income. For me, I need the salary advance to live between graduation and my start date (for example, when you rent your apartment you'll need first, last and security deposit - that is some hefty change). Second, yes I do pretty much max out my 401k (in my opinion, you'd be dumb not to especially at the tax bracket you'll be in).

For the record, I went to school in Boston and lived on about $8-10k in post-housing discretionary spending. So yes, I understand how to be frugal.

OK on to the budget/repayment - yes I had approximately $84k after taxes. 48k of that was minimum loan payment and rent (my rent was actually $2100 and that doesn't include cable/internet or electricity - probably another $200 each month on average, but I won't include that in what I am paying in the above calculation). So now were down to $36k. You suggest that I live on 20k discretionary spending or $1,666.66 per month or $416 per week. I would agree that in the abstract this seems like a ton of cash. Yet, it really isn't and I couldn't do it. Although admittedly, I am NOT a budgeter - never have been and hopefully never will need to be. I simply live the way I live - I am not a penny pincher nor a spendthrift. I have a good sense of living within my means. On to the spending of the money:

1. Working in biglaw requires a business/business casual wardrobe. For me, that included a new suit (and no, not some $250 JCPenney suit because well, they look cheap and to be honest most associates wear nicer clothes and you'll want to look the look when you get to your firm), several new pairs of pants, new dress shirts, new shoes, etc... This wardrobe isn't cheap. No, I wasn't blowing my money on $1k suits, I paid $500. My shirts were all bought on clearance at Bloomingdales for about $50 each. My shoes (3 pairs) I got from discount websites at about $125 each. So there goes some of that discretionary spending. How about dry cleaning? $2 a shirt, $7 for pants. Sure you could launder and iron yourself, but when you're working until 9:30/10:00pm most nights, you'll quickly realize that you're not spending your free time in front of an ironing board. Also, your clothes expenditures, while they do decrease, you need to continually add to your wardrobe - shoes wear out, you decided you need more than just one suit, etc...

2. What about your apartment? For me, that required purchasing furniture. Sure, I could have searched craigslist for cheap furniture (I did get my bed frame for $200 bucks off there, plus a $35 cab ride) but I simply decided that I am no longer a college student. At some point I would think you're done with the futon and folding tables. For me, that was when I started my career. So conservatively lets say you spend $3k on new furniture (bed, book shelves, couch, television, dining table, chairs, etc.) For me, I've purchased a few nice items and lot of Ikea stuff. My goal is to replace the Ikea stuff by purchasing one nice piece of furniture a year. Last year it was a nice couch/sectional that was about $2500. This year, I am not sure...

3. Food/Entertainment: I eat out everyday for lunch. Yes, I could make my own lunch, but see ironing shirt issue above (I don't like making lunch and don't want to spend the time grocery shopping and preparing). So, I spend about $10 a day on lunch (although to be fair, my firm has a number of free lunch days were you have team meetings, CLEs, etc... so in all actuality, it probably averaged out to about 4 days of buying lunch a year). Weekday dinner - when not eating at the firm on the client, is about $15 for me. Again, I don't cook. Going out to dinner with friends, easily $50-$100 a pop. Going to bars is also expensive. Dating is expensive. NYC if just freaking expensive. People who don't live here just don't understand. Movie tickets $15. Museum tickets $10-$20. Broadway shows $50-$150. I'm not doing this stuff every night, but it adds up. Newspaper subscriptions, etc.

4. Vacations/Travel: I presume that you'll be going on vacations. I used all 4 weeks of vacations at my firm and pretty much every other associate does as well. Vacations are expensive. Skiing vacations $1k-$2k for a week. Trips home at the holidays to see family ($750 - $1.5k) for a week. Getting the picture? Sure, I don't HAVE to spend so much on vacations, but when you're overworked you'll likely want to go somewhere nice.

5. Other incidentals: wedding gifts, birthday and christmas gifts, etc. Again, when I was in college, I never bought these gifts because everyone knew I didn't have any money. Once you start making $160k, the "I'm poor" line seems to ring a little bit hollow. So you're going to spending money on this, for me, it was probably $1k total.

So yea, 20k discretionary seems like a lot, but here it isn't getting you anything. I have no idea how much I actually spent - probably more like 25-30k. At the end of my first year I paid off about $20k extra in loans and still had about $10k in my checking account. After my second year (I maxed out my 401k that year) I paid down closer to $30k of my loans and still have about $10k in my checking and about $10k in a rainy day savings account. If you ask me, I think I am being pretty aggressive on the early pay down compared to the few other junior associates I've talked to.


Also, salary increases/bonuses. Stub year, I got 5k, 1st year I got 7.5k, 2nd year I got 10k. Also, got 10 k salary bump my second year, 15k more my third year (my current year). This isn't 50-60k pretax, it is 30k pretax, or about 15k after tax. I do have a spring bonus coming of $10k, which I'm using to pay down more debt.

So $40k a year in debt paydown is REALLY, REALLY aggressive. I couldn't have done it. I'm not saying it isn't possible (but I would be skeptical), but in my opinion it isn't realistic. As a third year (likely $205k gross), I think $40 is a likely possibility, but certainly not as a first year making $167.5k.

Frankly many (most?) people who don't live in NYC understand it. It's relatively common knowledge and it's one of the reasons why many Southern locales are growing so rapidly and one of the reasons why Blacks are reverse migrating out of NYC. I've never met a native New Yorker who wasn't quick to say how extraordinarily expensive it is; if you go on City-data.com you will meet a ton of people who will quickly tell you how unbelievably expensive NYC has become. Native New Yorkers frequently cite how much they love the city, but how they just can't afford to live there anymore. Many of my professors here at UVA cite NYC's costs for their choice to teach at UVA in Charlottesville as opposed to one of the NYC schools (and these are people with no debt, stable, high paying jobs saying this; as opposed to young 20 somethings with 200K + in debt working at a firm as an associate where their longevity is heavily in question). So before people get all excited about working at a "V10" in NYC they need to research what that actually entails. They also need to look at the incredibly short careers most people have at these firms. The CSO here at UVA says that most of our grads only last an average of 3 years at these firms. Either as a result of "up or out" or simply because they cannot sustain the level of work that one has to put in to stay at these firms.

About the only people who don't understand it are people who post on top-law-schools.com

[alumniguy]

Frankly many (most?) people who don't live in NYC understand it. It's relatively common knowledge and it's one of the reasons why many Southern locales are growing so rapidly and one of the reasons why Blacks are reverse migrating out of NYC. I've never met a native New Yorker who wasn't quick to say how extraordinarily expensive it is; if you go on City-data.com you will meet a ton of people who will quickly tell you how unbelievably expensive NYC has become. Native New Yorkers frequently cite how much they love the city, but how they just can't afford to live there anymore. Many of my professors here at UVA cite NYC's costs for their choice to teach at UVA in Charlottesville as opposed to one of the NYC schools (and these are people with no debt, stable, high paying jobs saying this; as opposed to young 20 somethings with 200K + in debt working at a firm as an associate where their longevity is heavily in question). So before people get all excited about working at a "V10" in NYC they need to research what that actually entails. They also need to look at the incredibly short careers most people have at these firms. The CSO here at UVA says that most of our grads only last an average of 3 years at these firms. Either as a result of "up or out" or simply because they cannot sustain the level of work that one has to put in to stay at these firms.

About the only people who don't understand it are people who post on top-law-schools.com

I mean I agree and I disagree. People who don't live in NYC know that it is expensive, but they don't realize just how expensive it really is. As NYC has gentrified since the 80's it has gotten increasingly more expensive. Living here for almost 3 years now, I think to myself man this just isn't sustainable. Yet, I'm shocked that the prices just continue to go up. As a bit of an example. I live within walking distance (10/15 minutes) to several grocery stores. Excluding the Trader Joes, the next cheapest grocery store is a Whole Foods - yea, I go to Whole Foods to get the cheapest food!

But, NYC is unlike any other city I've been to and have lived in. It is great. It's dynamic, always changing. There is a reason why it is getting increasingly more expensive and that is because it is desirable. If you can make enough money to take advantage of what the city has to offer, I don't think another city in the U.S. even comes close to competing with NYC.

Also citing costs in deciding to teach in Charlottesville vs. NYC seems a bit much to me. I mean if we were talking NYC and Chicago or NYC and D.C. it would be one thing. But I can't imagine that someone drawn to living in an urban area such as NYC would move to Charlottesville (admittedly I have no idea what life is like there) simply because of the high cost of living in NYC. Just doesn't seem rational to me. You either see NYC as something special that doesn't exist in any other U.S. city and you're willing to make financial sacrifices or you don't. If you don't you quickly realize that you can get much more for you buck in many other desirable cities in the U.S.

[sullidop]

This has been an interesting page. There's no debate that NYC is a phenomenal city, but most people fail to fully comprehend the cumulative effect of apt prices, food prices, ridiculous tax burden (has anyone talked about the city tax?), and entertainment costs that come with it. I don't think it's an underestimate to say any other biglaw city (maybe LA and DC excluded) would yield 10k+ in annual savings at market salary.

[Big Shrimpin]

How do taxes/expenses change if you live in, say, Brooklyn? I'm guessing not that much.

alumniguy, thanks for the insight, dood...much appreciated.

[alumniguy]

How do taxes/expenses change if you live in, say, Brooklyn? I'm guessing not that much.

alumniguy, thanks for the insight, dood...much appreciated.

No savings for Brooklyn (you're still in New York City county). I think there may be some savings if you live in NJ or CT, but haven't done the research.

[sullidop]

How do taxes/expenses change if you live in, say, Brooklyn? I'm guessing not that much.

alumniguy, thanks for the insight, dood...much appreciated.

Taxes don't change, Brooklyn is still NYC and subject to the same city/state taxes. For everything else, it depends on where in Brooklyn. More importantly, and alumniguy was getting at this, if you're making 160k you're gonna want a decent place to live, decent wardrobe, nice restaurants, etc. These things help you relax after the long hours and give you some piece of mind.

[alumniguy]

I will add that in my experience, most fist/second years live in Manhattan, Brooklyn or Queens. Very few live in New Jersey or Connecticut and the ones that do seem to have had ties to those areas that made them want to live there (as opposed to simply trying to reduce tax burden).

The taxes do suck, but at least you can write off state/city taxes on your federal taxes. Also, I got about $4k in refunds both years I've done my taxes since my first whole year.

Edit: I also know a few people who commute to Westchester County (north of Manhattan) and I don't think they pay city taxes either.

[BruceWayne]

Frankly many (most?) people who don't live in NYC understand it. It's relatively common knowledge and it's one of the reasons why many Southern locales are growing so rapidly and one of the reasons why Blacks are reverse migrating out of NYC. I've never met a native New Yorker who wasn't quick to say how extraordinarily expensive it is; if you go on City-data.com you will meet a ton of people who will quickly tell you how unbelievably expensive NYC has become. Native New Yorkers frequently cite how much they love the city, but how they just can't afford to live there anymore. Many of my professors here at UVA cite NYC's costs for their choice to teach at UVA in Charlottesville as opposed to one of the NYC schools (and these are people with no debt, stable, high paying jobs saying this; as opposed to young 20 somethings with 200K + in debt working at a firm as an associate where their longevity is heavily in question). So before people get all excited about working at a "V10" in NYC they need to research what that actually entails. They also need to look at the incredibly short careers most people have at these firms. The CSO here at UVA says that most of our grads only last an average of 3 years at these firms. Either as a result of "up or out" or simply because they cannot sustain the level of work that one has to put in to stay at these firms.

About the only people who don't understand it are people who post on top-law-schools.com

I mean I agree and I disagree. People who don't live in NYC know that it is expensive, but they don't realize just how expensive it really is. As NYC has gentrified since the 80's it has gotten increasingly more expensive. Living here for almost 3 years now, I think to myself man this just isn't sustainable. Yet, I'm shocked that the prices just continue to go up. As a bit of an example. I live within walking distance (10/15 minutes) to several grocery stores. Excluding the Trader Joes, the next cheapest grocery store is a Whole Foods - yea, I go to Whole Foods to get the cheapest food!

But, NYC is unlike any other city I've been to and have lived in. It is great. It's dynamic, always changing. There is a reason why it is getting increasingly more expensive and that is because it is desirable. If you can make enough money to take advantage of what the city has to offer, I don't think another city in the U.S. even comes close to competing with NYC.

Also citing costs in deciding to teach in Charlottesville vs. NYC seems a bit much to me. I mean if we were talking NYC and Chicago or NYC and D.C. it would be one thing. But I can't imagine that someone drawn to living in an urban area such as NYC would move to Charlottesville (admittedly I have no idea what life is like there) simply because of the high cost of living in NYC. Just doesn't seem rational to me. You either see NYC as something special that doesn't exist in any other U.S. city and you're willing to make financial sacrifices or you don't. If you don't you quickly realize that you can get much more for you buck in many other desirable cities in the U.S.

Did I have dinner with you last week?! A friend from NYC (the Bronx) said this WORD for WORD. You're totally right.

As far as the Charlottesville thing being a bit extreme I agree. I'm just using it more to point out that even to people who are financially stable/well off (ie professors with the credentials to teach at a top 10 law school) the city has gotten too expensive for them to feel comfortable living there. But yet people with 200K+ in debt are jumping into these "V10" jobs head first without even thinking and they have the idea that there 160K salary in NYC will easily sustain them until they meet all of their loan obligations.