The Law Industry In 3-5 Years

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ObamaHasDoneJack
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The Law Industry In 3-5 Years

Postby ObamaHasDoneJack » Wed Oct 07, 2009 1:16 am

So I am currently driving a taxi to save up money for law school next year, and am studying my butt off to score a 175 on the Feb LSAT. Anyway, today I heard an amazing story from one of my fares.

"Oh, you're going to go into law? My son just graduated NYU Law! It's very bad now though. He couldn't get a job for 4 months, and he signed with a law firm last week but for well under what he was hoping for?"

"If you don't mind my asking, how much did he sign for?"

"160K per year."

Granted, he is in corporate law, but is there this kind of promise coming out of a top 5? 160 starting???? The dream of being able to support my family and being able to afford one of my own in the next 5 years while doing what I love is what helps me sleep at night.

What are people's realistic expectations about the law industry when we come out, and for all you ex-finance people out there, what is a realistic expectation?

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M51
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Re: The Law Industry In 3-5 Years

Postby M51 » Wed Oct 07, 2009 2:03 am

You went to NYU right? (or are still attending).
Either way, I didn't know the job market was THAT bad that you'd have gone through the trouble to get a Taxi License (pain in the ass and expensive too).

On the off chance that you are not a flame. 160k is not "lower than expectations" for anyone. No one has expectations of above 160k for the first year unless your fare's son "expected" Wachtell (one of the hardest firms to get into). I'm guessing that even in this economy, more than half of NYU that wants 145-160k will still get it.

ObamaHasDoneJack
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Re: The Law Industry In 3-5 Years

Postby ObamaHasDoneJack » Wed Oct 07, 2009 2:24 am

M51 wrote:You went to NYU right? (or are still attending).
Either way, I didn't know the job market was THAT bad that you'd have gone through the trouble to get a Taxi License (pain in the ass and expensive too).

On the off chance that you are not a flame. 160k is not "lower than expectations" for anyone. No one has expectations of above 160k for the first year unless your fare's son "expected" Wachtell (one of the hardest firms to get into). I'm guessing that even in this economy, more than half of NYU that wants 145-160k will still get it.


yeah man, i have 2 nyu degrees. the prob is they're both BFA's. i do a lot of freelance film work (video editing, producing for diff websites) but it isn't consistent enough. i could have other jobs, but i want something that i can study on the job, can work only 2-3 days a week (cause i wanna study for the lsat two full days each week) and driving a cab was always something i thought would be interesting.

idk. it seemed like he was smarter cause the woman did say growing up, he used to always help his sister (who is in fordham) with her studying cause he was more advanced. other than that guy, i know 1 guy in nyu law school. he is in his year 2, and plans on working for the DA. needless to say, he won't get 160.

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SplitterPride
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Re: The Law Industry In 3-5 Years

Postby SplitterPride » Wed Oct 07, 2009 2:48 am

Just to put a lil perspective into the matter:


I will speak in terms of California, since thats where I am from.

Just last year, 13,000(!) CA law school graduates took the bar exam. In just the next 7 years or so, CA alone will saturate the market with an additional 100,000 graduates.

That is already on top of the overcrowded situation here in CA.

So you see how this can translate even more drastically for NY.

Strictly in the next 5 yrs, you are looking at an ever shrinking pot of gold...I am not too sure if the dream for a $160K or hell, anything above a $100K would be a reasonable dream to have in the coming years. Certainly someone might snag a comfortable gig, im just saying...lets not count on it.

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General Tso
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Re: The Law Industry In 3-5 Years

Postby General Tso » Wed Oct 07, 2009 2:51 am

SplitterPride wrote:Just to put a lil perspective into the matter:


I will speak in terms of California, since thats where I am from.

Just last year, 13,000(!) CA law school graduates took the bar exam. In just the next 7 years or so, CA alone will saturate the market with an additional 100,000 graduates.

That is already on top of the overcrowded situation here in CA.

So you see how this can translate even more drastically for NY.

Strictly in the next 5 yrs, you are looking at an ever shrinking pot of gold...I am not too sure if the dream for a $160K or hell, anything above a $100K would be a reasonable dream to have in the coming years. Certainly someone might snag a comfortable gig, im just saying...lets not count on it.


I did the math a while back....I don't think CA had more lawyers per capita than other states. I'll try to find it.

EDIT: Posted below. I chose CA, NY and GA/OR at random to compare a small market state. I probably should have done Florida and Texas instead. Oh well..

I think CA is a little unique though in that it allows non-ABA grads to take the bar and has 60+ total law schools. That alone could account for a significant increase in the bar members per capita.
Last edited by General Tso on Wed Oct 07, 2009 2:56 am, edited 1 time in total.

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General Tso
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Re: The Law Industry In 3-5 Years

Postby General Tso » Wed Oct 07, 2009 2:52 am

I did bar members as percentages of total population in response to another question about legal market saturation.

NY: 72,000/19,490,000 = 0.37%
CA: 160,000/36,800,000 = 0.43%
GA: 40,000/9,700,000 = 0.41%
OR: 13,000/3,790,000 = 0.34%

Those are total state populations.

For labor force:

CA: 160,000/18,500,000 = 0.86%
NY: 72,000/9,700,000 = 0.74%
GA: 40,000/4,800,000 = 0.83%

http://www.bls.gov/news.release/laus.t03.htm

Wikipedia and state bar pages for bar membership.

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M51
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Re: The Law Industry In 3-5 Years

Postby M51 » Wed Oct 07, 2009 3:25 am

SplitterPride wrote:Strictly in the next 5 yrs, you are looking at an ever shrinking pot of gold...I am not too sure if the dream for a $160K or hell, anything above a $100K would be a reasonable dream to have in the coming years. Certainly someone might snag a comfortable gig, im just saying...lets not count on it.


This guy supposidly is going for a 175 and has a 3.7 GPA.
Regardless, the fare's son was a NYU law grad. I think it's safe to say that a NYU law grad will be MUCH better off than the mass majority of JDs the US churns out... so there's a good probable chance that the NYU law grad will be that someone.

Also, in 3-5 years, the starting salary might even rise. For perspective, I don't think lawyer starting salaries ever stagnated for more than 5 years. Everyone's calling for the death of the biglaw model, but 1) no one really knows, they thought the old i-banking model was dead too, but nothing's changed so far 2) the new model may pay just as well or even better for certain people, and 3) for all the crap it gets, the legal profession's adapted fairly well for the past 300 years (always being one of the most well paid professions). It will adapt again, and 5 years is a long time...

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PLATONiC
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Re: The Law Industry In 3-5 Years

Postby PLATONiC » Wed Oct 07, 2009 3:58 am

M51 wrote:
SplitterPride wrote:Strictly in the next 5 yrs, you are looking at an ever shrinking pot of gold...I am not too sure if the dream for a $160K or hell, anything above a $100K would be a reasonable dream to have in the coming years. Certainly someone might snag a comfortable gig, im just saying...lets not count on it.


This guy supposidly is going for a 175 and has a 3.7 GPA.
Regardless, the fare's son was a NYU law grad. I think it's safe to say that a NYU law grad will be MUCH better off than the mass majority of JDs the US churns out... so there's a good probable chance that the NYU law grad will be that someone.

Also, in 3-5 years, the starting salary might even rise. For perspective, I don't think lawyer starting salaries ever stagnated for more than 5 years. Everyone's calling for the death of the biglaw model, but 1) no one really knows, they thought the old i-banking model was dead too, but nothing's changed so far 2) the new model may pay just as well or even better for certain people, and 3) for all the crap it gets, the legal profession's adapted fairly well for the past 300 years (always being one of the most well paid professions). It will adapt again, and 5 years is a long time...


Just like every prospective law school student, I hope that this is how it'll all play out.

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PLATONiC
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Re: The Law Industry In 3-5 Years

Postby PLATONiC » Wed Oct 07, 2009 4:49 am

SplitterPride wrote:Just to put a lil perspective into the matter:


I will speak in terms of California, since thats where I am from.

Just last year, 13,000(!) CA law school graduates took the bar exam. In just the next 7 years or so, CA alone will saturate the market with an additional 100,000 graduates.

That is already on top of the overcrowded situation here in CA.

So you see how this can translate even more drastically for NY.

Strictly in the next 5 yrs, you are looking at an ever shrinking pot of gold...I am not too sure if the dream for a $160K or hell, anything above a $100K would be a reasonable dream to have in the coming years. Certainly someone might snag a comfortable gig, im just saying...lets not count on it.


I personally feel that this might not apply to those who enroll at elite law schools. Although the number of $130K-$160K jobs might decrease as a result of the shrinking legal employment market, the number of elite law school graduates getting recruited by top law firms would be pretty steady. This is, of course, just speculation and wishful thinking, but if we consider the level of inflation in five years, I think breaking $100K wouldn't be too difficult, no matter how much starting salary ranges take a hit.

Anonymous User
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Re: The Law Industry In 3-5 Years

Postby Anonymous User » Wed Oct 07, 2009 8:48 am

M51 wrote: For perspective, I don't think lawyer starting salaries ever stagnated for more than 5 years. Everyone's calling for the death of the biglaw model, but 1) no one really knows, they thought the old i-banking model was dead too, but nothing's changed so far 2) the new model may pay just as well or even better for certain people, and 3) for all the crap it gets, the legal profession's adapted fairly well for the past 300 years (always being one of the most well paid professions). It will adapt again, and 5 years is a long time...


That's true for the top law firms, the salaries had a gradual rise from 100K to 125K to 145K to 160K. That is NOT true for everyone else. I think NALP did a study and determined that the median salary for entry attorneys has been at the 45-50K range for past 15 years. Most law firms out there do not even keep up with the pace of inflation, COL increases, and tuition increases.

Even though the majority of regular firms have not been increasing their salaries, they are currently taking advantage of the economic situation to DECREASE their salaries. They are pointing to the large firms and saying that they are decreasing their salaries because the larger firms are doing the same. They do not mention the fact that they weren't increasing their salaries in the 10 years prior to the economic slump.

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reasonable_man
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Re: The Law Industry In 3-5 Years

Postby reasonable_man » Wed Oct 07, 2009 10:01 am

Anonymous User wrote:
M51 wrote: For perspective, I don't think lawyer starting salaries ever stagnated for more than 5 years. Everyone's calling for the death of the biglaw model, but 1) no one really knows, they thought the old i-banking model was dead too, but nothing's changed so far 2) the new model may pay just as well or even better for certain people, and 3) for all the crap it gets, the legal profession's adapted fairly well for the past 300 years (always being one of the most well paid professions). It will adapt again, and 5 years is a long time...


That's true for the top law firms, the salaries had a gradual rise from 100K to 125K to 145K to 160K. That is NOT true for everyone else. I think NALP did a study and determined that the median salary for entry attorneys has been at the 45-50K range for past 15 years. Most law firms out there do not even keep up with the pace of inflation, COL increases, and tuition increases.

Even though the majority of regular firms have not been increasing their salaries, they are currently taking advantage of the economic situation to DECREASE their salaries. They are pointing to the large firms and saying that they are decreasing their salaries because the larger firms are doing the same. They do not mention the fact that they weren't increasing their salaries in the 10 years prior to the economic slump.



Most law firms couldn't care less about COL, inflation, 'market rate,' etc. Most small firms pay 35 to 65k to start. Most mid-sized firms pay 60 to 120. Most Big firms pay 135 ro 160.

The number of big firm jobs is shrinking and will not come back anytime soon. The number of clients these firms can service and the amount of work each client has to dole out has contracted sharply with the economy. Unless someone is planning on spinning off Meril, restarting Bear Sterns, and reviving the countless other banks that went under, the client count is not increasing any time soon.

What that means is that jobs at all hiring levels, small firm through big-firm and right through to public interest is going to continue to be very competitive. Law school is a risk, not a golden ticket. It really is that simple.

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M51
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Re: The Law Industry In 3-5 Years

Postby M51 » Wed Oct 07, 2009 1:27 pm

Only 3 years before the crash, market rate for biglaw was 125k.
So, in the last 4 years, market salary for biglaw has risen by almost 10k per year on average :wink: It's all how you look at it. Will market rate for biglaw be 170k next year? No. But in 5 years, could it be 200k? Absolutely. Again, I speak only to the NYU Law -esq exit opportunities the OP is referring to / hoping for. It's entirely possible that biglaw is shrinking.

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nealric
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Re: The Law Industry In 3-5 Years

Postby nealric » Thu Oct 08, 2009 12:26 pm

"Oh, you're going to go into law? My son just graduated NYU Law! It's very bad now though. He couldn't get a job for 4 months, and he signed with a law firm last week but for well under what he was hoping for?"

"If you don't mind my asking, how much did he sign for?"

"160K per year."


This whole story doesn't make sense.

1. He didn't have a job for 4 months after graduation but somehow managed to get a market paying job last week. I would be shocked if more than 5 people in the entire US got a market paying job 4 months after graduation in this economy absent some seriously extenuating circumstances (i.e. son of biggest client. Even then, why didn't he have something before?)

2. He was "expecting" more than 160k. Nobody expects more than 160k a year unless they are delusional. Willams & Connoley and Wachtell are the only firms in the entire US that guarantee more than that. Did he seriously believe the "NY to 190!" stuff or something?


In any event, before this economy, 160k was a realistic expectation. At schools like Columbia 80%+ of graduates started at this salary (most who didn't did public interest or clerkships and could have started at that salary if they had wanted to). Biglaw jobs will still be starting at 160 for the foreseeable future, but the number of those jobs available will be very few.




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