Law School Still a Bad Investment

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PDaddy
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Law School Still a Bad Investment

Postby PDaddy » Fri Aug 03, 2012 4:33 pm

There is likely already a thread on this, but I wanted to ask a direct question. Is the analysis too simplistic? How and why/why not?

http://www.law.com/jsp/nlj/PubArticleNL ... 0703155128

noggo10
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Re: Law School Still a Bad Investment

Postby noggo10 » Fri Aug 03, 2012 4:37 pm

HYS is still a good investment as is basically any T-14 with $$ in my opinion

chasgoose
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Re: Law School Still a Bad Investment

Postby chasgoose » Fri Aug 03, 2012 4:49 pm

I mostly agree with this article except for the analysis concerning the "Hot Prospect." Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model. I doubt many "Hot Prospects" are earning $80k, but instead are either earning $50-60k for non-biglaw or $115-160k for biglaw jobs depending on the market. That said, if the article assumes that only 25% of the Hot Prospects will get the biglaw job that will pay that salary, then I guess its still a bad investment. I mostly just find the way the article is written confusing as it seems to suggest that even within the 25% chance of getting a job category, people won't be making enough to justify law school.

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dingbat
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Re: Law School Still a Bad Investment

Postby dingbat » Fri Aug 03, 2012 4:52 pm

Note how "hot prospect" has a 25% chance at landing biglaw and "solid Performer" goes to a T2.

I did a detailed analysis in the Penn thread a few months back based on current employment statistics showing that sticker (including living expenses) is a very good investment

I am tired of these bullcrap opinions. I've been meaning to build a model that will allow anyone to analyze the data for any school to determine whether of not the school is worth it
(unfortunately I've been busy at work)

If anyone wants to list different factors to take into consideration (eg tuition, other costs, scholly, loans, etc) that would be a great help.

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dingbat
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Re: Law School Still a Bad Investment

Postby dingbat » Fri Aug 03, 2012 4:56 pm

chasgoose wrote:I mostly agree with this article except for the analysis concerning the "Hot Prospect." Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model. I doubt many "Hot Prospects" are earning $80k, but instead are either earning $50-60k for non-biglaw or $115-160k for biglaw jobs depending on the market. That said, if the article assumes that only 25% of the Hot Prospects will get the biglaw job that will pay that salary, then I guess its still a bad investment. I mostly just find the way the article is written confusing as it seems to suggest that even within the 25% chance of getting a job category, people won't be making enough to justify law school.

Its the way an academic approaches investment prospects: use the weighted average mean outcome as the outcome.

In real life businesses, several possible outcomes need to be shown, to get a sense of best/typical/worst case. Of course, an academic shitboomer in an ivory tower has never had to make those decisions

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bowser
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Re: Law School Still a Bad Investment

Postby bowser » Fri Aug 03, 2012 4:58 pm

Here's the thread from when the article first came out: viewtopic.php?f=2&t=172203

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Aberzombie1892
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Re: Law School Still a Bad Investment

Postby Aberzombie1892 » Fri Aug 03, 2012 5:11 pm

chasgoose wrote:Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model.


The issue here is that we don't know that law school salaries are bimodal. If you look at the NALP salary chart, it states that the salaries displayed only account for 41% of all salaries. The other 59% of the salaries attained by graduates are not accounted for in that chart. As such, at any non-T14, odds are the salary provided by the median student(s) is (are) not accounted for in that chart. That suggests that the salaries may not be bimodal after all.

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Re: Law School Still a Bad Investment

Postby chasgoose » Fri Aug 03, 2012 5:38 pm

Aberzombie1892 wrote:
chasgoose wrote:Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model.


The issue here is that we don't know that law school salaries are bimodal. If you look at the NALP salary chart, it states that the salaries displayed only account for 41% of all salaries. The other 59% of the salaries attained by graduates are not accounted for in that chart. As such, at any non-T14, odds are the salary provided by the median student(s) is (are) not accounted for in that chart. That suggests that the salaries may not be bimodal after all.


I'm pretty sure most people agree about the bimodal nature of legal salaries. After big law which can be anywhere from $115-180k depending on market/firm, there is a massive drop in legal salaries to the $30-80k range (with the vast majority probably somewhere around $40-60k). I find it hard to believe that a significant portion of the 59% of unreported salaries are in that $80-120k spot not covered by either big law or other JD-required jobs. Most likely they fall somewhere in the lower group of salaries. What makes the argument in the article problematic is the way that they present the "average" Hot Prospect graduate as making $80k. In reality there are probably very few starting JD-required jobs that have an $80k salary. Most are either a $40-80k higher or $20-30k lower.

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bowser
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Re: Law School Still a Bad Investment

Postby bowser » Fri Aug 03, 2012 5:41 pm

Aberzombie1892 wrote:
chasgoose wrote:Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model.


The issue here is that we don't know that law school salaries are bimodal. If you look at the NALP salary chart, it states that the salaries displayed only account for 41% of all salaries. The other 59% of the salaries attained by graduates are not accounted for in that chart. As such, at any non-T14, odds are the salary provided by the median student(s) is (are) not accounted for in that chart. That suggests that the salaries may not be bimodal after all.


What chart are you referring to? I think most people take it for granted that higher salaries are reported while lower ones are not--i.e., if there were a lot of people making 70-100K they would be reporting it.

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dingbat
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Re: Law School Still a Bad Investment

Postby dingbat » Fri Aug 03, 2012 5:42 pm

Realistically, hot prospect should be someone at a T14 looking at biglaw, solid performer should be at a T1 looking at a decent job ($40-$80k) and also ran should be at a T3 looking at funemployment

I can find so many flaws in that analysis it ain't even funny

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SuperCerealBrah
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Re: Law School Still a Bad Investment

Postby SuperCerealBrah » Fri Aug 03, 2012 6:00 pm

chasgoose wrote:
Aberzombie1892 wrote:
chasgoose wrote:Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model.


The issue here is that we don't know that law school salaries are bimodal. If you look at the NALP salary chart, it states that the salaries displayed only account for 41% of all salaries. The other 59% of the salaries attained by graduates are not accounted for in that chart. As such, at any non-T14, odds are the salary provided by the median student(s) is (are) not accounted for in that chart. That suggests that the salaries may not be bimodal after all.


I'm pretty sure most people agree about the bimodal nature of legal salaries. After big law which can be anywhere from $115-180k depending on market/firm, there is a massive drop in legal salaries to the $30-80k range (with the vast majority probably somewhere around $40-60k). I find it hard to believe that a significant portion of the 59% of unreported salaries are in that $80-120k spot not covered by either big law or other JD-required jobs. Most likely they fall somewhere in the lower group of salaries. What makes the argument in the article problematic is the way that they present the "average" Hot Prospect graduate as making $80k. In reality there are probably very few starting JD-required jobs that have an $80k salary. Most are either a $40-80k higher or $20-30k lower.



The difference between $30,000 and $80,000 is a MASSIVE difference. Hell, even the difference between 30,000 and $45-50,000

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SuperCerealBrah
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Re: Law School Still a Bad Investment

Postby SuperCerealBrah » Fri Aug 03, 2012 6:04 pm

bowser wrote:
Aberzombie1892 wrote:
chasgoose wrote:Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model.


The issue here is that we don't know that law school salaries are bimodal. If you look at the NALP salary chart, it states that the salaries displayed only account for 41% of all salaries. The other 59% of the salaries attained by graduates are not accounted for in that chart. As such, at any non-T14, odds are the salary provided by the median student(s) is (are) not accounted for in that chart. That suggests that the salaries may not be bimodal after all.


What chart are you referring to? I think most people take it for granted that higher salaries are reported while lower ones are not--i.e., if there were a lot of people making 70-100K they would be reporting it.




The bolded is responsible for so many misconceptions and weak arguments. I think people should just, in general, stop doing this.

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Lieut Kaffee
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Re: Law School Still a Bad Investment

Postby Lieut Kaffee » Fri Aug 03, 2012 6:09 pm

I have no idea how he comes up with those opportunity cost figures. I had 0 job prospects after UG, making law school a slam dunk investment almost by default.

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JazzOne
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Re: Law School Still a Bad Investment

Postby JazzOne » Fri Aug 03, 2012 6:15 pm

Lieut Kaffee wrote:I have no idea how he comes up with those opportunity cost figures. I had 0 job prospects after UG, making law school a slam dunk investment almost by default.

Because having 0 job prospects is better after LS?

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SuperCerealBrah
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Re: Law School Still a Bad Investment

Postby SuperCerealBrah » Fri Aug 03, 2012 6:25 pm

JazzOne wrote:
Lieut Kaffee wrote:I have no idea how he comes up with those opportunity cost figures. I had 0 job prospects after UG, making law school a slam dunk investment almost by default.

Because having 0 job prospects is better after LS?



Oh please, they don't have 0 job prospects. It is very, very difficult to get a job these days. But that doesn't mean they don't exist or that it is impossible to get one. I am fucking sick of statements like that.

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spleenworship
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Re: Law School Still a Bad Investment

Postby spleenworship » Fri Aug 03, 2012 6:27 pm

JazzOne wrote:
Lieut Kaffee wrote:I have no idea how he comes up with those opportunity cost figures. I had 0 job prospects after UG, making law school a slam dunk investment almost by default.

Because having 0 job prospects is better after LS?


:lol:

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Re: Law School Still a Bad Investment

Postby Anonymous User » Fri Aug 03, 2012 6:31 pm

In some regional markets (e.g. Little Rock), $60-80K IS Big Law. The top firms (Friday, Wright, Kutak Rock, Quattlebaum, Rose, etc.) all pay around that amount. It may well be that way in other secondary markets as well. I know for a fact that New Orleans is similar (besides a few national firms with offices there). I think some of these surveys showing a bimodal distribution are very coastal-obsessed.

Since you really have to be above median at most T14's to get a decent job, I really don't think any of these schools are a good investment with a COA higher than the average starting salary for small law ($50,000). I took a full ride at a T20 over a T6 at sticker for this very reason. I am still regretting it as wasted opportunity cost, as the market looks to be a bloodbath this year.
Last edited by Anonymous User on Fri Aug 03, 2012 6:34 pm, edited 1 time in total.

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Lieut Kaffee
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Re: Law School Still a Bad Investment

Postby Lieut Kaffee » Fri Aug 03, 2012 6:32 pm

JazzOne wrote:
Lieut Kaffee wrote:I have no idea how he comes up with those opportunity cost figures. I had 0 job prospects after UG, making law school a slam dunk investment almost by default.

Because having 0 job prospects is better after LS?

Touche. Jobless and in debt is worse than jobless. I had to take a leap of faith that I could get biglaw. But still, it's important to note how everything in that article hinges on the opportunity cost assumption. I don't even know what getting a career after UG looks like.

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Re: Law School Still a Bad Investment

Postby redbullvodka » Fri Aug 03, 2012 6:43 pm

Anonymous User wrote:In some regional markets (e.g. Little Rock), $60-80K IS Big Law. The top firms (Friday, Wright, Kutak Rock, Quattlebaum, Rose, etc.) all pay around that amount. It may well be that way in other secondary markets as well. I know for a fact that New Orleans is similar (besides a few national firms with offices there). I think some of these surveys showing a bimodal distribution are very coastal-obsessed.

Since you really have to be above median at most T14's to get a decent job, I really don't think any of these schools are a good investment with a COA higher than the average starting salary for small law ($50,000). I took a full ride at a T20 over a T6 at sticker for this very reason. I am still regretting it as wasted opportunity cost, as the market looks to be a bloodbath this year.


So going 160K in debt would be a bad idea if the average starting salary for small law was 100K? I hope you don't think that way.

(I'm not saying it is, your salary estimation is right; just pointing out what happens if you extend your logic.)

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SuperCerealBrah
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Re: Law School Still a Bad Investment

Postby SuperCerealBrah » Fri Aug 03, 2012 6:49 pm

redbullvodka wrote:
Anonymous User wrote:In some regional markets (e.g. Little Rock), $60-80K IS Big Law. The top firms (Friday, Wright, Kutak Rock, Quattlebaum, Rose, etc.) all pay around that amount. It may well be that way in other secondary markets as well. I know for a fact that New Orleans is similar (besides a few national firms with offices there). I think some of these surveys showing a bimodal distribution are very coastal-obsessed.

Since you really have to be above median at most T14's to get a decent job, I really don't think any of these schools are a good investment with a COA higher than the average starting salary for small law ($50,000). I took a full ride at a T20 over a T6 at sticker for this very reason. I am still regretting it as wasted opportunity cost, as the market looks to be a bloodbath this year.


So going 160K in debt would be a bad idea if the average starting salary for small law was 100K? I hope you don't think that way.

(I'm not saying it is, your salary estimation is right; just pointing out what happens if you extend your logic.)



For smaller city "big law" such as Little Rock and New Orleans, you also have to keep in mind that cost of living is a LOT less than New York, California, etc. $60,000 in Little Rock goes much further than in NYC.

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Aberzombie1892
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Re: Law School Still a Bad Investment

Postby Aberzombie1892 » Fri Aug 03, 2012 6:52 pm

chasgoose wrote:
Aberzombie1892 wrote:
chasgoose wrote:Reducing the salary earned by those the author puts in the "Hot Prospect" category to an average doesn't really reflect the bi-modal legal salary model.


The issue here is that we don't know that law school salaries are bimodal. If you look at the NALP salary chart, it states that the salaries displayed only account for 41% of all salaries. The other 59% of the salaries attained by graduates are not accounted for in that chart. As such, at any non-T14, odds are the salary provided by the median student(s) is (are) not accounted for in that chart. That suggests that the salaries may not be bimodal after all.


I'm pretty sure most people agree about the bimodal nature of legal salaries. After big law which can be anywhere from $115-180k depending on market/firm, there is a massive drop in legal salaries to the $30-80k range (with the vast majority probably somewhere around $40-60k). I find it hard to believe that a significant portion of the 59% of unreported salaries are in that $80-120k spot not covered by either big law or other JD-required jobs. Most likely they fall somewhere in the lower group of salaries. What makes the argument in the article problematic is the way that they present the "average" Hot Prospect graduate as making $80k. In reality there are probably very few starting JD-required jobs that have an $80k salary. Most are either a $40-80k higher or $20-30k lower.


My point is not that all of those salaries are inbetween $80-120K - it is that the salaries that are not reported are likely in the low range. What is currently considered to be a spike at $160K appears to be a spike primarily because a disproportionate amount of the reported salaries are high (either by self reporting by the student or by independent reporting by career services). As a result, if those salaries were included, there would likely be a massive spike between $0-65K and a small, but visible, fluctuating line from $65K to $180.

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JazzOne
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Re: Law School Still a Bad Investment

Postby JazzOne » Fri Aug 03, 2012 7:16 pm

SuperCerealBrah wrote:
JazzOne wrote:
Lieut Kaffee wrote:I have no idea how he comes up with those opportunity cost figures. I had 0 job prospects after UG, making law school a slam dunk investment almost by default.

Because having 0 job prospects is better after LS?



Oh please, they don't have 0 job prospects. It is very, very difficult to get a job these days. But that doesn't mean they don't exist or that it is impossible to get one. I am fucking sick of statements like that.

lol

He's the one who said it, and you attack me. Pay attention to what's going on please.

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SuperCerealBrah
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Re: Law School Still a Bad Investment

Postby SuperCerealBrah » Fri Aug 03, 2012 7:18 pm

JazzOne wrote:
SuperCerealBrah wrote:
JazzOne wrote:
Lieut Kaffee wrote:I have no idea how he comes up with those opportunity cost figures. I had 0 job prospects after UG, making law school a slam dunk investment almost by default.

Because having 0 job prospects is better after LS?



Oh please, they don't have 0 job prospects. It is very, very difficult to get a job these days. But that doesn't mean they don't exist or that it is impossible to get one. I am fucking sick of statements like that.

lol

He's the one who said it, and you attack me. Pay attention to what's going on please.




I wasn't directing it just at you.

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JazzOne
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Re: Law School Still a Bad Investment

Postby JazzOne » Fri Aug 03, 2012 7:23 pm

SuperCerealBrah wrote:I wasn't directing it just at you.

I hate it when they do that.




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