LSDAS GPA: 2.82; LSAT: 155 Forum

[romothesavior]

Fantastic post delBarco, as always.

[Mickey Quicknumbers]

Romo:

I read the NYT article several days ago. It gives ancedotal evidence backed up by some alarming sticker prices. It's nice as a qualitiative look at law schools. However, it is by no means an economic analysis. Anyone with training in economics would laugh (the same goes for most NYT/Washington Post/USA Today articles.)

The recession is a demand side shock. A large number of law schools is a supply side shock. There is a monumental difference between the two. Decreasing demand, along with sticky wages, leads to artificially high unemployment. This is a short-run phenomena. Eventually prices adjust, or the government boosts aggregate demand, and employment goes back to potential.

Structural issues are different because they are more important regarding distributive issues. Increasing the supply will lead to a short-run decrease in employment. However, and much more importantly, in the long-run employment will go back to potential equilibrium. Unfortunately for lawyers their average wage will decrease. As the barrier to entry of a legal job decreases more people will enter the market. The more people in the market the lower wages will be (it's rather simple math.)

This is slightly more complicated because labor is hetorgenous. However, the basic neoclassical model of "unions" is a good way to think of the legal market. By preventing anyone from becoming a lawyer the economic rent the people currently in the legal market have will decrease. The market will become more competitive. Consumer surplus will increase, producer surplus will decrease, and the deadweightloss will decrease (societies better off.)

For consumers this is a good thing. It is not a good thing if false advertising and misleading information is setting up lower tier lawyers for failure. The ABA is partly to blame for this. Perfect information from the ABA would dramatically increase competition and lead to a more flexible legal market.

Assuming distribution throughout the legal market Ave Maria graduates, all else equal, would not compete with T1 graduates. There will always be anecdotal exceptions to the rule. I'm looking at aggregates. Quantitative analysis is the only proper way to look at an issue. In this case I'm using a wide array of neoclassical and modern economic theory to make my point.

The assumption of constant distribution is probably unrealistic. The bottom 25-50% of the legal market is probably being "smooshed" together in the long-run due to a number of reasons that deviate away from perfect competition.

To make it simple: Supply side issues, like more schools, cause unemployment in the SR and depress wages in the LR. Demand side issues, like a recession, cause unemployment in the SR.

Seriously. Put down your economics book. The things you're saying right now have no bearing on the legal hiring market to date, and those of us who have been actually closely following it for the past 2-3 years are just going to think less of you if you keep rambling like this. And those who don't know better will actually listen to you, and could make a very very poor decision based on your faux-knowledge.

[DanInALionsDen]

kapital, I won't overstate my knowledge of economics--which is what I suspect you're doing--but your understanding seems simplistic, and does not account for the realities of the legal field. Wages will not decrease among the top few hundred firms because no one wants to be the firm to break with market rate salaries. Instead they'll hire less people and demand more work. Maybe when the economy recovers they will begin hiring again, but the consensus I've heard from legal economists whom I suspect have far more training than you, is that the old model is permanently broken, and that firms will never hire the same way again. That means that people who would have done firm work are searching for government jobs, and some people who would have done government jobs are going back to their home states to find employment, competing with students in schools local to that market who would never normally have to square off against a t14 grad.

Also law is a very old field, and has not balanced out across over century in the way you suggest it will by 2015. There are areas where legal service is widely unavailable despite the over supply of lawyers. This is one of the things the NYT article discusses.

I've seen your numbers so I understand that you want to convince yourself that you're making the right decision in applying to law school, but I can't say that I think you that you are. You're taking a massive risk, and it isn't fair for you to encourage others to do the same without acknowledging that the gamble is huge and the odds are not favorable. You seem so interested in economics and business, so why not do those?

[acirilli1722]

Don't know much about Ave Maria as shown above but I have been looking at schools in Florida and have found that due to the top schools in the state being primarily regional that the bottom 6 or 7 schools in FL have some shady reputations (especially Coastal and their scholarship stipulations). With this, arguments over quality of T3/4 schools aside, it doesn't seem like any school in FL besides UF FSU UM and Stetson would be a smart choice. I still think some T3/4 are better than they are given credit for but for the case of FL I would personally avoid the lower tier schools. Don't know if thats credible or not, just an opinion I have gathered.

[romothesavior]

Instead they'll hire less people and demand more work. Maybe when the economy recovers they will begin hiring again, but the consensus I've heard from legal economists whom I suspect have far more training than you, is that the old model is permanently broken, and that firms will never hire the same way again.

This is so true. While things may turn for the better to some degree, and obviously the worst is behind us, it is a huge mistake to assume that things are going to bounce back.

Hiring partners at top firms around the country and high ranking people at NALP have explicitly stated that the old model is dead or at least severely altered. I'm more inclined to believe them over someone with a rudimentary understanding of general economic principles.

[kapital98]

delbarco:

Thank you for the posts. Your point on oversaturation (a structural issue) of Florida's legal market seems valid. The most important point you mention is signalling. Tiers in hiring exist to quickly tell firms who are good candidates and the supply curve is no longer smooth.

I would still have to disagree with on the dire employment statistics. I would ask for sources but valid sources don't really exist. It's basically who has the best anecdotal network.

1) My point to the OP is that if he wants to become a lawyer a T3/T4 degree is a viable option as long as he doesn't go into too much debt. It's all a matter of doing a cost/benefit analysis (specifically placing an existence value on your job.)

2) My point to the critics is that following the legal market over the last 2-3 years is a terrible idea if your looking ahead at the next 3-5 years. Markets fluctuate, recessions occur, and so do recoveries.

My posts have been centered in economic theory, empirical analysis of professional labor markets, and economic forecasts. I would love to get into a heterdox discussion of labor economics but it is simpler to stick to neoclassic economics for the sake of discussion.


DanInALionsDen:

I'm retaking in Febuary! If the OP wants to go to a T3/T4, or cannot get a better score, I'm willing to give him advice on what they should do. I personally want a better LSAT score for either T14 (unlikely) or more scholarship money in the T1/T2. I'm planning on holding out for 1-2 years of work experience.

To elaborate on the "old model" -- analysts no longer believe large law firms create profitable economies of scale. They may even create diseconomies of scale (once again not enough data exists to do a proper analysis.) However, this doesn't change my argument. If anything your feeding right back into the concept of 'signaling' and a heterogenous labor market with rigidities.

[kapital98]

This is so true. While things may turn for the better to some degree, and obviously the worst is behind us, it is a huge mistake to assume that things are going to bounce back.

Hiring partners at top firms around the country and high ranking people at NALP have explicitly stated that the old model is dead or at least severely altered. I'm more inclined to believe them over someone with a rudimentary understanding of general economic principles.[/quote]


When did I say that? My entire argument is more competition = decreasing average wages. What do you mean "bounce back?" If you mean go back to having the same economic rent... then, no. If you mean back to full employment... then, yes.


"Rudimentary Economic Principles" -- I love straw man arguments

[Mickey Quicknumbers]

And just fwiw, this should serve you well about ave maria:

http://www.top-law-schools.com/forums/v ... 4&t=126049

[romothesavior]

So your argument is essentially that the tiers "signal" to employers where we as students belong, and the lower tiered students belong in PI and small firms, while the T1 students belong in the biglaw firms? Haha... wow. If only that's how it worked.

Maybe you should inform the hiring director of a little-known, non-prestigious PI office that I listened to give a talk the other day. She said they only take top 1/3 from WUSTL (which actually shocked me). Your "signaling" argument is ridicuous. Small firms and PI gigs are uber-competitive, they usually care about grades, and they usually care about where you went to school. They aren't going to say, "Wow... this median T4 student is just a much better fit for us than that T1 in the top 1/3. After all, he goes to a shitty school and we're a shitty firm!" Also, stop saying things like this:

If anything your feeding right back into the concept of 'signaling' and a heterogenous labor market with rigidities.

...because it is making me and everyone else ITT stop listening to you.

[romothesavior]

When did I say that? My entire argument is more competition = decreasing average wages. What do you mean "bounce back?" If you mean go back to having the same economic rent... then, no. If you mean back to full employment... then, yes.

1. Name one biglaw firm that has cut salaries. You will be looking a while (I actually don't even think there are any in the NLJ 250, but maybe there's a small handful).
2. Go ask a hiring partner if they think their firm will EVER get back to pre-ITE employment levels. They will laugh you out of their office. This is a conversation about employment, after all, so this is extremely relevant.
3. Stop talking about shit that you clearly have zero understanding of.

[kapital98]

Romo:

You don't understand what I'm trying to inform you. (Generally whenever someone begins with "so basically" it means there creating a straw man -- of course you know that because you did excellent on the LSAT -- I'm not being sarcastic either)

In the 1980's labor economist began to formalize the concept of 'search' costs. The greater degree of human capital required for labor the more heterogeneous the labor market becomes. Professionals have a tremendous amount of human capital. For low paying jobs employers can basically pay the market rate for labor. Very little search costs are involved because little advertisement/training/etc is involved in matching an employee with an employer.

The problem is the more sophisticated the work becomes the greater search costs become. An effort to remove these costs is to eliminate a large swath of potential employees by creating "signals," like education and job experience, to give the employer an easier to organize list of canidates.

Law schools do this by requiring an LSAT and GPA. I'm sure there are some people in high school that would be better law students than current students. A law degree does not directly use any undergraduate education. In this case an undergraduate education is required because it signals to law schools that a candidate is qualified. (If you want to take this further you can see why more education does not always lead to more productive workers.)

In your case schools and grades are a signal. If they were not than the prospective employer would give a NYU students and a NY Law student the same chance at a job. NY students could be better than NYU students. Extensive tests would show this to be true. However, probability would show this to be usually not the case. By using signals the firm may not make the best choice each time but overall they should be better off.

Do you understand yet? I don't mean to be disrespectful but you do not understand the economic fundamentals beneath your examples.

(I'm not intending ad hominem attacks but I am curious if you've studied statistical analysis, economic theory, or any public policy)

[Mickey Quicknumbers]

delbarco:

Thank you for the posts. Your point on oversaturation (a structural issue) of Florida's legal market seems valid. The most important point you mention is signalling. Tiers in hiring exist to quickly tell firms who are good candidates and the supply curve is no longer smooth.

I would still have to disagree with on the dire employment statistics. I would ask for sources but valid sources don't really exist. It's basically who has the best anecdotal network.

Valid sources don't really exist?? Ok, if you say so. I'm not pulling these numbers out of the sky. A lot of those numbers are my own guestimations, yes. When you have the 8 largest (see: only large) firms in Orlando going from an average hiring class of 12 grads in 2007 to about 2.5 in 2009, and you look at how many kids are actually on law review (or just in school generally) in the state, I can tell you those numbers aren't that far off.
And i'm willing to bet that, specific to the legal hiring market, you don't have much of an anecdotal network at all, or else your brushes wouldn't be stroking in the other direction.

1) My point to the OP is that if he wants to become a lawyer a T3/T4 degree is a viable option as long as he doesn't go into too much debt. It's all a matter of doing a cost/benefit analysis (specifically placing an existence value on your job.)

don't even let me open up a can of cost/benefit-analysis on your raw little behind. Don't. Even.

2) My point to the critics is that following the legal market over the last 2-3 years is a terrible idea if your looking ahead at the next 3-5 years. Markets fluctuate, recessions occur, and so do recoveries.

My posts have been centered in economic theory, empirical analysis of professional labor markets, and economic forecasts. I would love to get into a heterdox discussion of labor economics but it is simpler to stick to neoclassic economics for the sake of discussion.

Yes, yes, we've got that, you're oh-so-gloriously trained in the field of labor market theory or whatever. But again, your argument loses any respect at all because you clearly know absolutely nothing about the legal hiring market specifically. No, firms are not going to drop the 160 standard. Yes, recoveries will occur, but you don't know anything about what that actually means to the LEGAL hiring market.

[acirilli1722]

You may want to re-think law school and look into becoming an Econ professor.

[DanInALionsDen]

delbarco:

DanInALionsDen:

I'm retaking in Febuary! If the OP wants to go to a T3/T4, or cannot get a better score, I'm willing to give him advice on what they should do. I personally want a better LSAT score for either T14 (unlikely) or more scholarship money in the T1/T2. I'm planning on holding out for 1-2 years of work experience.

To elaborate on the "old model" -- analysts no longer believe large law firms create profitable economies of scale. They may even create diseconomies of scale (once again not enough data exists to do a proper analysis.) However, this doesn't change my argument. If anything your feeding right back into the concept of 'signaling' and a heterogenous labor market with rigidities.

I'm not going to keep responding, because you seem to have convinced yourself of what you would like to believe, as economists are apt to do. I would just advise strongly that when you do go to law school you ditch the economic jargon. A kid with a very similar demeanor to yours (from what I can gauge) tried that in my contracts class, and the professor first pretended not to understand him, asking "What are you talking about" (he was using the phrase "highest value user"), and then the professor proceeded to completely school the kid on economics. It's easy to use the rhetoric of a field to exaggerate one's knowledge, but using jargon in colloquial conversation is really a distancing tactic used to prevent others from engaging with your ideas. You come off as arrogant at best--lecturing a law student on the details of the legal market with only a hypothetical knowledge of it yourself and an undergrad economics degree--and at worst you come off as deceptive--pretending to know more than you do and overstating your confidence in your assertions (fraud in the contracts world).

[kapital98]

When did I say that? My entire argument is more competition = decreasing average wages. What do you mean "bounce back?" If you mean go back to having the same economic rent... then, no. If you mean back to full employment... then, yes.

1. Name one biglaw firm that has cut salaries. You will be looking a while (I actually don't even think there are any in the NLJ 250, but maybe there's a small handful).
2. Go ask a hiring partner if they think their firm will EVER get back to pre-ITE employment levels. They will laugh you out of their office. This is a conversation about employment, after all, so this is extremely relevant.
3. Stop talking about shit that you clearly have zero understanding of.

You're completely misunderstanding the big picture. You're only focusing on biglaw. I'm talking about the aggregate legal market. Over time real wages -- not nominal -- will decrease for the "average" lawyer. Once you start talking about biglaw salaries then a lot of unrelated issues, like changes in progressive taxation, come into effect.

It is a fundamental law of economics that labor markets, if left unaltered, will naturally go back to potential equilibrium. If you don't agree with that statement than you don't believe in modern, or classical, economics. A lot of interesting caveats may exist, like an unequal wage distribution, but employment will go back to potential nonetheless.

Please, look at long-run market trends. The only reason a market would maintain above natural rates of unemployment is because of market power (ex: unions or monopolies) or government involvement.

[romothesavior]

delbarco:

DanInALionsDen:

I'm retaking in Febuary! If the OP wants to go to a T3/T4, or cannot get a better score, I'm willing to give him advice on what they should do. I personally want a better LSAT score for either T14 (unlikely) or more scholarship money in the T1/T2. I'm planning on holding out for 1-2 years of work experience.

To elaborate on the "old model" -- analysts no longer believe large law firms create profitable economies of scale. They may even create diseconomies of scale (once again not enough data exists to do a proper analysis.) However, this doesn't change my argument. If anything your feeding right back into the concept of 'signaling' and a heterogenous labor market with rigidities.

I'm not going to keep responding, because you seem to have convinced yourself of what you would like to believe, as economists are apt to do. I would just advise strongly that when you do go to law school you ditch the economic jargon. A kid with a very similar demeanor to yours (from what I can gauge) tried that in my contracts class, and the professor first pretended not to understand him, asking "What are you talking about" (he was using the phrase "highest value user"), and then the professor proceeded to completely school the kid on economics. It's easy to use the rhetoric of a field to exaggerate one's knowledge, but using jargon in colloquial conversation is really a distancing tactic used to prevent others from engaging with your ideas. You come off as arrogant at best--lecturing a law student on the details of the legal market with only a hypothetical knowledge of it yourself and an undergrad economics degree--and at worst you come off as deceptive--pretending to know more than you do and overstating your confidence in your assertions (fraud in the contracts world).

I like you a lot. Please post more (although I understand you not wanting to post more ITT... I just mean more generally).

[beardown_tho]

I read everything kapital said as, "I just took labor economics."

[kapital98]

delbarco:

It's easy to use the rhetoric of a field to exaggerate one's knowledge, but using jargon in colloquial conversation is really a distancing tactic used to prevent others from engaging with your ideas. You come off as arrogant at best--lecturing a law student on the details of the legal market with only a hypothetical knowledge of it yourself and an undergrad economics degree--and at worst you come off as deceptive--pretending to know more than you do and overstating your confidence in your assertions (fraud in the contracts world).

Clear definitions are key to intellectual conversations. If you would like an explanation of any term or idea I will try my best. I completely agree with you that jargon should be avoid unless absolutely necessary.

But I am amazed that when others do not know what you are talking about they immediately attack your knowledge. I'm willing to support any of my ideas with a variety of sources.

You do not need an "undergrad economics degree" to understand economics. So many law students think they understand the legal market. Then they talk to similar students, all with the same lack of knowledge, and profess their intelligence. At its best TLS forums are useful. At its worst it is full of group think.

Civil debate is essential to learning from others. Thank you for the discussion.

[Mickey Quicknumbers]

When did I say that? My entire argument is more competition = decreasing average wages. What do you mean "bounce back?" If you mean go back to having the same economic rent... then, no. If you mean back to full employment... then, yes.

1. Name one biglaw firm that has cut salaries. You will be looking a while (I actually don't even think there are any in the NLJ 250, but maybe there's a small handful).
2. Go ask a hiring partner if they think their firm will EVER get back to pre-ITE employment levels. They will laugh you out of their office. This is a conversation about employment, after all, so this is extremely relevant.
3. Stop talking about shit that you clearly have zero understanding of.

You're completely misunderstanding the big picture. You're only focusing on biglaw. I'm talking about the aggregate legal market. Over time real wages -- not nominal -- will decrease for the "average" lawyer. Once you start talking about biglaw salaries then a lot of unrelated issues, like changes in progressive taxation, come into effect.

It is a fundamental law of economics that labor markets, if left unaltered, will naturally go back to potential equilibrium. If you don't agree with that statement than you don't believe in modern, or classical, economics. A lot of interesting caveats may exist, like an unequal wage distribution, but employment will go back to potential nonetheless.

Please, look at long-run market trends. The only reason a market would maintain above natural rates of unemployment is because of market power (ex: unions or monopolies) or government involvement.

Did it ever occur to you that the legal hiring market (an area which you seem to, still, know nothing about) had a hiring bubble that has burst at the biglaw level, and the effects are trickling down into every other sector of the market. The city of Atlanta alone laid off 7% of it's legal workforce. Not only do we have this post-bubble economy that will emerge once we dig our way out of this recession that will NEVER reach pre-bubble trends because of how the collapse permanently disfigured the structure of legal hiring. But there is also still an abnormally high amount of human capital (oooooh an economics word!!) floating around unemployed STILL from the collapse that have yet to be absorbed back into the market. And, for heavens sake, PLEASE stop talking in textbook. You sound like you're trying to argue with someone in Mexico City using only Portuguese.

[romothesavior]

I fully understand what you mean by search costs. I may not be an econ guy, but I'm not a moron.

You are puffing it up in econ-speak to sound smart (cool story bro), but your argument is the same tired argument I hear from so many 0Ls. "Well, T4 students can't get biglaw, so that means they look for small firm and PI gigs, and these firms like to hire T4 people."

This is a mistaken assumption because 1) these places will still typically prefer the student from the better school, or at the very least, they'll be on the same playing field and 2) these places do not drive legal hiring. A small law firm can go years without hiring someone out of law school (if they ever do) and PD's offices are operating on bare bones budgets. If your plan is to go to a T4 and bank on getting a small firm job (especially one for 50-60k, lol at that), you will be sorely disappointed.

[romothesavior]

Then they talk to similar students, all with the same lack of knowledge, and profess their intelligence.

Yeah you're right, what delBarco, Daninlionsden, and I are all saying is just groupspeak. It doesn't come from talking to hiring partners, reading NALP and ATL articles, talking to career services, or personal experience. Kapital >>>>>>>> Hiring partners who say the jobs aren't coming back.

I look forward to tomorrow when the 2Ls and 3Ls wake up and see this thread.

[kapital98]

delBarco:

Let me explain this in simple words:

People lost their jobs. More people chasing fewer jobs, without money decreasing, means more people of out jobs. Eventually this will get better. The legal place will eventually get better and jobs will exist for all. They may not be as good as they were before but they will exist for all.

Not having a job hurts. It hurts people without jobs because they don't have pay and it also makes them less valuable the longer they don't have a job. Eventually the [surplus army of labor -- I had to get in a marxist term ] will find jobs. Everyone will be totally happier than during the recession.

The sky is not falling. Eventually things will get better.

P.S. Compared to Romo you're a genius. We don't agree but at least you say something of substance.

[romothesavior]

The legal place will eventually get better and jobs will exist for all. They may not be as good as they were before but they will exist for all.

hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha

This is rich.

[kapital98]

Just to clarify [back to econ speak]: That means it will go back to the NAIRU for lawyers. (NOT 0% unemployment)

[romothesavior]

P.S. Compared to Romo you're a genius. We don't agree but at least you say something of substance.

Do me a favor. Come back to me in 3 years, and let me know who the genius was: the person who advised someone not to go to the T4 and instead study hard for the LSAT and retake, or the economics whiz-kid who took the plunge into some TTT despite all the warnings. I'd love to hear from you again in 3 years when 90% of your class is unemployed at graduation or working doc review in some bunker for $20 an hour.

In the meantime, I've gotta go to sleep. But I look forward to coming back tomorrow and seeing all the job-seeking 2Ls and 3Ls at T1s telling you what a moron you are.