Which law schools are worth 160k debt?

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UVAIce
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Re: Which law schools are worth 160k debt?

Postby UVAIce » Wed Mar 30, 2016 4:50 pm

It's been my experience that people are a little hyperbolic about big law. Some of this is a transfer of the anxiety of getting a good outcome out of law school (which is legitimately tough for people outside of the "elite" law schools) to if the entire endeavor was worth it.

Big law, and law in general, is not a place to get "rich." But then very few traditional career paths will make you rich. The "real" money out there is in starting your own business in whatever industry you practice in. Will a solid career in law beat out the majority of job outcomes out there? Yes, with the caveat that it depends on what factors you value the most.

That and anyone who throws around a job with a salary of $60k as being middling (or somehow easy to obtain) either lives someplace where that kind of money is peanuts or is just not living in the reality that most current and past law students live in. I attended a Reasonable top ~100 undergrad for free and did very well there, but in my infinite wisdom I decided to major in history - great education, lousy job prospects. Coming out of undergrad I would have done underground street fighting for a stable $60k income. Going to a good law school gave me the opportunity to get my foot in the door to good paying work and gives my education a kind of portability it did not previously have. With my salary now I can easily afford a a nice rental home for my family (soon to be purchased), pay off my student debt, save money and occasionally do something fun.

The real problem that I see with people is that they don't really appreciate how consuming a job in big law can be. One of my fellow summer associates quit after ~4 months on the job. The circumstances were kind of strange, but it happens. To be honest, I would not have wanted big law to be my first experience with full-time employment. Because not only do you have to deal with the fire hose that is a constant work flow, but you have to figure out how to interact at work, deal with clients, what behavior is acceptable, etc., at the same time. When you have something to compare it to it can be bearable if not a pretty good time.

abl
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Re: Which law schools are worth 160k debt?

Postby abl » Wed Mar 30, 2016 5:07 pm

fliptrip wrote:
TheGoat18 wrote:Huh interesting. What is the average time spent in BigLaw? Would 3 years be more appropriate? It would certainly change the calculation. Also, 80k with 3% raise a year seems way low to me based on what I have read. This would seem to be a below median exit outcome from BigLaw. Your model also assumes a higher opportunity cost than most - but certainly not all - law students will bear. Also, I assume your model doesn't take into account people who have no interest in BigLaw or clerking? They exist. I would add around 5% to your BL+FC rates to take this into account.

So at 10 years, even under fliptrip's pretty mediocre outcome for your legal career, which seems to draw many inferences against the student, you break even. After that your earning power is still far higher than most. I understand the many, many, reasons why the T14 to BigLaw pipeline is an awful life decision, but I have never seen anything close to convincing demonstrating that it is a poor financial decision for the average student. Obviously taking sticker at Chicago over a half scholarship at Penn is stupid but just not going? I don't buy it.


Before I address what you've said, I personally like this conversation a lot more because it's not just about how someone feels about having debt.

1. Models are more valuable the more conservative they are because confirmation bias is a real thing. I think assuming 3 years in biglaw is too much and doesn't accurately price in the inherent risks to the job (it's miserable). I actually think the model might be a tinge too aggressive in assuming the 2 years and would maybe be even better at assuming 1 year.
2. The model assumes that only 80% of a law school class is interested in biglaw, which has the effect of dramatically lowering the discount rates on the cashflows. For instance, UVA's BL+FC % is 68%, but I calculate its biglaw odds of 85%. Beyond that, my model definitely does not consider non-Big Law directed people. What they are doing is almost certain to be a negative financial investment and is pretty clearly undertaken for non-pecuinary reasons. Also, their debt service is strange...for many their plan is to not ever actually service their debt, so I'd model them completely differently.

My model is designed to move some assumptions, so let's be more optimistic and give our student differing tenures in biglaw:

3 years:
UVA: +61k
GULC: -$65k

4 years:
GULC: -$30k

Let's do one more, the rosiest of all pictures. 4 years in biglaw, along with a $125k exit and very low opportunity costs of $20,000.
GULC: +118k

Let's give even odds of the rosy and the flip special--mediocre city at Georgetown: here's your expected NPV: +7k

So, then, much depends on how long you can stay in BL and what you end up in upon exiting. There are schools for which it is a good investment at $160k regardless of which pole you end up on and there are schools which aren't.


Out of curiosity, why stop at 10 years? I get that it's helpful to see that Yale, for example, has a very good NPV over even a relatively small time frame. But in evaluating whether GULC or UVA is a wise financial decision, we should be looking at how the choice impacts your whole career, right? E.g., it'd be a financially irrational decision to skip out on GULC based on your model saying that it has a negative NPV over 10 years if its NPV over 20 (or more likely 30) years is positive.

Also, it could be helpful to have a "realistic model" (probably 3 years with $125k post-bl salary and $50k opportunity cost), a "conservative model (maybe 1 year with $100k post-bl salary and a $60k opportunity cost), and a "rosy model" (maybe 4-5 years with $150k post-bl with $30k opportunity cost). Actually, if we're being really fancy, it'd be nice to have some sort of an excel spreadsheet that folks could put their own numbers into and have it calculate it for them. Anyone wanna volunteer to make one?

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fliptrip
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Re: Which law schools are worth 160k debt?

Postby fliptrip » Wed Mar 30, 2016 5:12 pm

It's just a habit I have in modeling, loosely based on the fact that I feel adequately assured that life will still exist on this planet in something like the same way as it does now for only the next 10 years. I mean, you never know when financial Armageddon, world war, or something like that will happen.

You're 100% right, a sensitivity analysis would really be best. I have a dream of creating something that TLSers can use to get help making this decision that takes just a few inputs and gives some kind of output. It's still a dream at this stage though.

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Re: Which law schools are worth 160k debt?

Postby TheGoat18 » Wed Mar 30, 2016 5:20 pm

This is all good stuff. I still have seen nothing to convince me that 160k in debt for a T14 degree is a poor financial decision for someone with little opportunity cost. Once you land BigLaw, which most do, it appears to almost certainly be a shrewd financial decision, if not a particularly worthwhile life choice.

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UVAIce
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Re: Which law schools are worth 160k debt?

Postby UVAIce » Wed Mar 30, 2016 5:26 pm

What salary scale are you using for the 3 years of biglaw fliptrip?

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fliptrip
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Re: Which law schools are worth 160k debt?

Postby fliptrip » Wed Mar 30, 2016 5:29 pm

TheGoat18 wrote:This is all good stuff. I still have seen nothing to convince me that 160k in debt for a T14 degree is a poor financial decision for someone with little opportunity cost.


I'd generally agree with you. But there's more to life than the things we can count and a big one is your own happiness and well being. No one can tell you what either of those are worth to you.

personofinterest
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Re: Which law schools are worth 160k debt?

Postby personofinterest » Wed Mar 30, 2016 5:29 pm

abl wrote:Look, this is going to be a completely individualized decision. What's "worth it" is going to depend on your access to other sources of income (via your own hypothetical alternative careers or via your family's largess), your debt tolerance, and your career preferences (because it is certainly going to be "worth it" for some students to pay more for law than they would for other comparable careers). It is obviously "worth it" for some students to go $160k in debt to attend some law schools. The trickier question comes when we start generalizing -- when is it "worth it" for the average student, for example. But I'm not really sure if that sort of generalization is helpful or even possible.


This.

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fliptrip
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Re: Which law schools are worth 160k debt?

Postby fliptrip » Wed Mar 30, 2016 5:30 pm

UVAIce wrote:What salary scale are you using for the 3 years of biglaw fliptrip?


I used a 160, 170, 185 scale. For 4th year I used 210. I didn't include any bonuses, which definitely would skew things.

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Re: Which law schools are worth 160k debt?

Postby Cogburn87 » Wed Mar 30, 2016 5:32 pm

TheGoat18 wrote:This is all good stuff. I still have seen nothing to convince me that 160k in debt for a T14 degree is a poor financial decision for someone with little opportunity cost. Once you land BigLaw, which most do, it appears to almost certainly be a shrewd financial decision, if not a particularly worthwhile life choice.

lol

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Re: Which law schools are worth 160k debt?

Postby TheGoat18 » Wed Mar 30, 2016 5:35 pm

My only, narrow, point is that for most people 160k debt at a T14 is a good financial decision that will generally result in a positive effect on earning potential and financial security. Does it offer enough fiscal carrots to overcome the giant, barbed stick that is life as a BigLaw attorney? Now that is a subjective question.

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Re: Which law schools are worth 160k debt?

Postby kaiser » Wed Mar 30, 2016 5:37 pm

fliptrip wrote:
UVAIce wrote:What salary scale are you using for the 3 years of biglaw fliptrip?


I used a 160, 170, 185 scale. For 4th year I used 210. I didn't include any bonuses, which definitely would skew things.


Don't forget that a great many biglaw firms have moved away from a lockstep comp system and many no longer have the same big jump in the 4th year.

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Tiago Splitter
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Re: Which law schools are worth 160k debt?

Postby Tiago Splitter » Wed Mar 30, 2016 5:39 pm

TheGoat18 wrote:My only, narrow, point is that for most people 160k debt at a T14 is a good financial decision that will generally result in a positive effect on earning potential and financial security. Does it offer enough fiscal carrots to overcome the giant, barbed stick that is life as a BigLaw attorney? Now that is a subjective question.

I think it's more that you can be relatively confident you won't end up in a worse position than if you hadn't gone. To the extent it provides a premium to the average student, a lot of that will be eaten up by lost income during law school, taxes, and loan payments.

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fliptrip
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Re: Which law schools are worth 160k debt?

Postby fliptrip » Wed Mar 30, 2016 5:39 pm

kaiser wrote:
fliptrip wrote:
UVAIce wrote:What salary scale are you using for the 3 years of biglaw fliptrip?


I used a 160, 170, 185 scale. For 4th year I used 210. I didn't include any bonuses, which definitely would skew things.


Don't forget that a great many biglaw firms have moved away from a lockstep comp system and many no longer have the same big jump in the 4th year.


Very good to know. Thanks.

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Re: Which law schools are worth 160k debt?

Postby fliptrip » Wed Mar 30, 2016 5:41 pm

TheGoat18 wrote:My only, narrow, point is that for most people 160k debt at a T14 is a good financial decision that will generally result in a positive effect on earning potential and financial security. Does it offer enough fiscal carrots to overcome the giant, barbed stick that is life as a BigLaw attorney? Now that is a subjective question.


Giant barbed sticks are not discussed nearly enough in these parts. Some can be kinda fun, but maybe that's just me.

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Re: Which law schools are worth 160k debt?

Postby TheGoat18 » Wed Mar 30, 2016 5:42 pm

Anyone have any experience with mitigating some of that lost income during 2L/3L? I was thinking about trying to tutor the LSAT privately for 10 hours a week or so. Seems like you could cut down on that debt significantly if you did that. Definitely a better use of a small chunk of your time than schoolwork.

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Re: Which law schools are worth 160k debt?

Postby Jchance » Wed Mar 30, 2016 5:55 pm

If you really want to be a lawyer, I see paying 160k for HYS is worth it. Those who are debt-adverse might disagree though.

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Re: Which law schools are worth 160k debt?

Postby abl » Wed Mar 30, 2016 6:00 pm

TheGoat18 wrote:Anyone have any experience with mitigating some of that lost income during 2L/3L? I was thinking about trying to tutor the LSAT privately for 10 hours a week or so. Seems like you could cut down on that debt significantly if you did that. Definitely a better use of a small chunk of your time than schoolwork.


Unless you're dead-set on biglaw and have a SA, this seems definitely to me to be a worse use of your time than schoolwork.

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Re: Which law schools are worth 160k debt?

Postby Loquitur Res » Wed Mar 30, 2016 6:36 pm

TheGoat18 wrote:I find it ridiculously bordering on insane to suggest that no law school is worth 160k ever. Unlike many folks on this forum with Ivy undergrad degrees in economics and bulge bracket experience - who are probably idiots for taking out six figure debt for a law degree - quite a few people who take out this debt are making an at least defensible, probably shrewd decision. This is assuming a T14 degree of course.

Some of us graduated from state schools with shit GPA's in useless degrees with no sort of experience besides nonprofessional jobs to keep the lights on in college. I've never worked in an office in my life and now I have a 1L SA lined up that will pay me more money in one summer than some of my friends with equally useless degrees make in an entire year. Certainly more than most of my old work buddies from the service industry make.

Thanks to my unexpected 1L SA I will owe about 120k at repayment according to the LST calculator. You cannot tell me that I, or the many law students like me would be better off as far as lifetime earnings and overall financial security go if we would have pursued low paying entry level office jobs with our liberal arts degrees.

As far as happiness and life enjoyment, well maybe I would have been better off sticking with working in restaurants. But I find it almost impossible to believe that 160k in debt for a T14 degree is not a shrewd investment if you have no other opportunities to break into a high earning field.


One of the few posts on this forum that I can really relate to.

Of my graduating class of 250 kids from high school I would bet less than 10 are making starting big law salary, and I graduated 10+ years ago! A higher percentage are probably dead/ incarcerated. But with my liberal arts degree I was pulling in less than 35K. Many people my age in my area are working service industry pulling in 30-50k with the only way of moving up is becoming manager and then hopefully opening up their own bar/restaurant. I think people forget that many of us don't have super great tech, consulting, business careers we are giving up.

I do feel that people need to remember that for many of us, the risk of NOT taking on some debt and going to law school is a lifetime of service industry. I am debt averse (I went for the lesser school with full scholly) but I think that its hard to find many people who came from working/middle class upbringings to upper middle class adulthoods without taking on risk and working/hustling their ass off. Not saying the legal field is without issues, but what other paths are there that do not come with some risk of failure and result in a better chance of a 100K+ salary?

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Re: Which law schools are worth 160k debt?

Postby A. Nony Mouse » Wed Mar 30, 2016 7:04 pm

TheGoat18 wrote:Thanks fliptrip. Obviously a four year exit to a 125k job is not the "rosiest" of all scenarios, but it is an unequivocally good outcome. Does anyone have data on what a T14--->BigLaw---->In House career looks like later in life? Assuming 1 year off four year exit, you are out of BigLaw at 30. What does your average In House attorney who decided to stay working in law make at 40? at 50?

Unless everyone gets laid off, I would think most attorneys who exit from BigLaw firms are making at least 250k total comp at 50. Probably much more. That is nothing to scoff at. And certainly beyond the earning potential of your typical history or political science graduate.

I know I'm behind in responding to this, but I feel like this is always such a narrow view of jobs and careers and majors. I think one of the best things we could do for kids is give them a sense of the VAST range of jobs out there that are not doctor, lawyer, or generic "business." And also make clear that just because you start in crap jobs after you graduate doesn't mean you stay in crap jobs forever.

I know that makes me sound bootstrap-y and boomerish and maybe it is. But I'm not saying everyone can be an astronaut. I'm just saying that it's not that there aren't other options for generic liberal arts majors. And I'm even fine with law and don't think it's as terrible an idea as most people here do. It's just not the only option.

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Re: Which law schools are worth 160k debt?

Postby asdfdfdfadfas » Wed Mar 30, 2016 7:09 pm

Loquitur Res wrote:
TheGoat18 wrote:I find it ridiculously bordering on insane to suggest that no law school is worth 160k ever. Unlike many folks on this forum with Ivy undergrad degrees in economics and bulge bracket experience - who are probably idiots for taking out six figure debt for a law degree - quite a few people who take out this debt are making an at least defensible, probably shrewd decision. This is assuming a T14 degree of course.

Some of us graduated from state schools with shit GPA's in useless degrees with no sort of experience besides nonprofessional jobs to keep the lights on in college. I've never worked in an office in my life and now I have a 1L SA lined up that will pay me more money in one summer than some of my friends with equally useless degrees make in an entire year. Certainly more than most of my old work buddies from the service industry make.

Thanks to my unexpected 1L SA I will owe about 120k at repayment according to the LST calculator. You cannot tell me that I, or the many law students like me would be better off as far as lifetime earnings and overall financial security go if we would have pursued low paying entry level office jobs with our liberal arts degrees.

As far as happiness and life enjoyment, well maybe I would have been better off sticking with working in restaurants. But I find it almost impossible to believe that 160k in debt for a T14 degree is not a shrewd investment if you have no other opportunities to break into a high earning field.


One of the few posts on this forum that I can really relate to.

Of my graduating class of 250 kids from high school I would bet less than 10 are making starting big law salary, and I graduated 10+ years ago! A higher percentage are probably dead/ incarcerated. But with my liberal arts degree I was pulling in less than 35K. Many people my age in my area are working service industry pulling in 30-50k with the only way of moving up is becoming manager and then hopefully opening up their own bar/restaurant. I think people forget that many of us don't have super great tech, consulting, business careers we are giving up.

I do feel that people need to remember that for many of us, the risk of NOT taking on some debt and going to law school is a lifetime of service industry. I am debt averse (I went for the lesser school with full scholly) but I think that its hard to find many people who came from working/middle class upbringings to upper middle class adulthoods without taking on risk and working/hustling their ass off. Not saying the legal field is without issues, but what other paths are there that do not come with some risk of failure and result in a better chance of a 100K+ salary?


Well, what would you say is the absolute WORST outcome? I mean let's say you graduate at median out of Georgetown and have to get a 45k-55k a year doc review job with 160k in debt. Are you ok with that? How long does that type of situation last? You have no real transferable skills so now you have committed to law and literally have to make it work. The interest is going to accumulate pretty quickly.
In my mind, if you aren't among the roughly 20% of people who end up getting in Biglaw out of law school and you borrow 160k you are pretty much trapped.

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Re: Which law schools are worth 160k debt?

Postby jnwa » Wed Mar 30, 2016 8:18 pm

fliptrip wrote:It's just a habit I have in modeling, loosely based on the fact that I feel adequately assured that life will still exist on this planet in something like the same way as it does now for only the next 10 years. I mean, you never know when financial Armageddon, world war, or something like that will happen.

You're 100% right, a sensitivity analysis would really be best. I have a dream of creating something that TLSers can use to get help making this decision that takes just a few inputs and gives some kind of output. It's still a dream at this stage though.


Do this. You arent like us useless liberal arts majors. You have excel skills. Help us.

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Re: Which law schools are worth 160k debt?

Postby totesTheGoat » Wed Mar 30, 2016 9:05 pm

GFox345 wrote:Again, I am a PARALEGAL at a large firm, but I have no reason to think that Associates live in misery like so many people on this site like to assume is the natural condition of all associates. I have met several senior partners that work a lot, but they still have what appears to be a happy life with a loving family. The stress load varies with the course of a given matter. You are going to get a RADICALLY different estimation of quality of life out of an associate during a trial as opposed to other times.


As somebody who also works at a large firm, I can tell you that the associates I'm surrounded with are billing 2200 hours on average. To not do so would immediately take them out of contention for partner. Assuming that they're not fraudsters, that means they're averaging 55-60 hours worked/week in order to get to 43/week billable. Some weeks more, some weeks less. No, it's not averaging 80/week or 100/week (although I just talked to some associates in my group who billed 120+ the week of their trial, so 100/week isn't unheard of). Nothing that you've said puts any dent in my personal experience that the quality of life in biglaw is awful. Perhaps your firm is better than mine at those things?

I have made friends with several of these associates, and they all indicated that law school was one of the best decisions of their lives and that they would do it again if they could.


And I'm sure that a vast majority of lottery winners say that buying the winning ticket was one of the best decisions of their lives. Not to say that law school is a gamble like a lottery ticket, but you're getting a really frickin' rosy picture when you're talking to people who got the best outcome possible out of law school.

My point is that the natural position of a reasonable person is that of skepticism - not pessimism. Just like it is not safe to assume that you'll love BigLaw, it is equally unsound to assume that you will hate it.


This is unfettered crap. The balance fallacy is strong here. It's not unreasonable to assume that most people are going to dislike a job that is notorious for destroying any sense of work-life balance.

As far as the claim that the average T-14 graduate (that takes out roughly $160k after interest and fees) is starving in the street or utterly miserable, I have yet to see evidence to substantiate it.


Beat that strawman!! Who the hell is saying that you're going to be poor if you go to a T-14 and take out $160k? Who's saying that you're guaranteed to be miserable? All we're saying is that it's extraordinarily risky, and you will be tied to a pretty big anchor, no matter your outcome.
Last edited by totesTheGoat on Wed Mar 30, 2016 9:18 pm, edited 1 time in total.

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Re: Which law schools are worth 160k debt?

Postby totesTheGoat » Wed Mar 30, 2016 9:17 pm

UVAIce wrote:That and anyone who throws around a job with a salary of $60k as being middling (or somehow easy to obtain) either lives someplace where that kind of money is peanuts or is just not living in the reality that most current and past law students live in.


$60k is middling only in comparison to 6-figures in debt. Once you pay off your debt, $60k is a decent living, let alone $160k.

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Re: Which law schools are worth 160k debt?

Postby BigZuck » Wed Mar 30, 2016 9:47 pm

BigZuck wrote:If we all just agreed that the big lawyers on this site are a bunch of babies/whiners who have never earned an honest day's pay in their life, do you think we could stop having this thread? Or would a new iteration pop up every two weeks just like it does now?

I'm totally good with agreeing that they're all dishonest whining babies if we can spare ourselves these threads.

+1

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Tempo
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Re: Which law schools are worth 160k debt?

Postby Tempo » Wed Mar 30, 2016 9:51 pm

BigZuck wrote:
BigZuck wrote:If we all just agreed that the big lawyers on this site are a bunch of babies/whiners who have never earned an honest day's pay in their life, do you think we could stop having this thread? Or would a new iteration pop up every two weeks just like it does now?

I'm totally good with agreeing that they're all dishonest whining babies if we can spare ourselves these threads.

+1


I'm so sorry for posting this.




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