Off Penn WL... Forum

[coreaves23]

.......

[ManoftheHour]

@ManoftheHour and Max -- thank you both. I had never even heard of the Cambridge packets until you just posted them. Max, thanks for your in-depth study guide! I did burn through most of the new material, so I would definitely need to go back to PTs 1-40.

For what its worth, I took the LSAT 3 times and didn't improve at all. Then someone told me about drilling. 4th time was the charm and drilling was key. Do those packets untimed. Take as much time as you need on every question. Use the Manhattan forums if you're stuck and need an explanation. Make sure you know exactly why the wrong answers are wrong and why the right answers are right. If you can do that, you'll beast through the easy questions in seconds and have way more time for the harder ones (as well as the analytical skills to properly solve them).

[03152016]

I'm a retaker too. Prepped six months on my first time around and way underperformed, retook and blew it out of the water.

[Penn16]

I pm'ed OP about this, but I figured I'd share this with the thread as a whole:

Overall, I think the advice about retaking the LSAT is potentially very good advice, but there's a major caveat that no one seems to be catching, and that is opportunity cost. Shouldering $250K in debt is very scary, of course, but by delaying law school another year, you are also delaying what is most likely a $160K salary right out of school. Now you might not want to bank on that, but given Penn's employment stats, it might not be a terribly unreasonable presumption. I also don't know what kind of money you are currently making at your job, but just for demonstrative purposes, let's work through a thought experiment.

Let's say you're currently making $50K pre-tax. After taxes, you probably take home let's say $35K, and with a $160K salary in NY (probably the most common outcome at Penn), it'd be about $100K after taxes, just to make the math easy. Again, I don't know what your annual CoL is now, but I can't imagine being able to save more than a few grand on $35K in after-tax income in the extra year that you would delay law school that would justify losing out on the extra $60K in after-tax income you would earn by starting your career one year sooner.

Many in this threat, including potentially current students, don't seem to have a solid grasp on how debt works: it's really all about cash flow. Yes, $250K in debt is very scary and will take a long time to pay off, but that doesn't mean you have to have a terrible lifestyle (biglaw hours for the first few years aside). The IBR payment plan after school, which you will most likely qualify for even with a $160K salary, means that you'll pay 15% of your "disposable income", which the gov calculates to be your pre-tax monthly income minus 150% of the federal poverty level. On a $160K salary, I believe this will mean about $1,800-$2,000/month in loan payments on take-home income of about $8,000/month. If you want to plan for $2,000/month in rent + utilities + internet, etc. in a city like NY or DC, that still leaves you in a good, flexible cash flow state, with $4,000/month of take-home pay left over to cover food, entertainment, unexpected/miscellaneous expenses, and savings.

Down the road, banks will typically allow borrowers, especially potentially well-qualified borrowers like young professionals, to be leveraged up to 30-35% of their pre-tax income, meaning that with the 15% loan payments, you have another 15-20% to leverage for a home mortgage and car loan. Based on the previous math (and for ease, assume you're in a city without a need for a car, like NY), that means you could take out a mortgage that carries a $2,000-$3,000/month payment, which is certainly enough to buy a bigger/nicer house/apartment/condo than you would probably need as a young lawyer in your mid to late 20s. And again, keep in mind these loan + mortgage payments only take you up to $4,000-$5,000 of your $8,000 monthly take-home pay, leaving $3,000-$4,000/month for other living expenses, entertainment, and savings while still giving you the opportunity to build up equity in some sort of home. Assuming you don't leverage yourself to death, you could certainly keep those payments down to $4,000/month total and have the other half to live fairly well and save.

All of this depends on how risk-averse you are, and how comfortable you are with betting that you'll get biglaw and survive it for at least the first few years out of law school. Of course, all this opportunity cost talk could go out the window if you get really significant scholarship money from ND or a lower T-14, because the more scholarship you get, the more it offsets the earning differential between the year off before attending law school and the lost potential salary from going straight through. My only point in this was to say that Penn at sticker is not as terrifying as some people might make it out to be, but you should still keep in mind that the debt will indeed linger for a long time. At that point, it's just a matter of managing your cash flow. Everyone always freaks about how they absolutely need to pay off the debt ASAP, and yes, you will pay more interest over the life of the loan with the cash flow approach, but you will also enjoy a better quality of life and will still be able to play it relatively conservative given your flexibility and ability to save money or pay a little extra towards your loans each month if you want. So anyway, that's my really unintentionally long two cents.


TL;DR - Penn at sticker isn't necessarily scary, but do the math, weigh your personal risk-aversion and options, and decide. Retake is a good idea, but not the only one.

[jbagelboy]

I pm'ed OP about this, but I figured I'd share this with the thread as a whole:

Overall, I think the advice about retaking the LSAT is potentially very good advice, but there's a major caveat that no one seems to be catching, and that is opportunity cost. Shouldering $250K in debt is very scary, of course, but by delaying law school another year, you are also delaying what is most likely a $160K salary right out of school. Now you might not want to bank on that, but given Penn's employment stats, it might not be a terribly unreasonable presumption. I also don't know what kind of money you are currently making at your job, but just for demonstrative purposes, let's work through a thought experiment.

Let's say you're currently making $50K pre-tax. After taxes, you probably take home let's say $35K, and with a $160K salary in NY (probably the most common outcome at Penn), it'd be about $100K after taxes, just to make the math easy. Again, I don't know what your annual CoL is now, but I can't imagine being able to save more than a few grand on $35K in after-tax income in the extra year that you would delay law school that would justify losing out on the extra $60K in after-tax income you would earn by starting your career one year sooner.

Many in this threat, including potentially current students, don't seem to have a solid grasp on how debt works: it's really all about cash flow. Yes, $250K in debt is very scary and will take a long time to pay off, but that doesn't mean you have to have a terrible lifestyle (biglaw hours for the first few years aside). The IBR payment plan after school, which you will most likely qualify for even with a $160K salary, means that you'll pay 15% of your "disposable income", which the gov calculates to be your pre-tax monthly income minus 150% of the federal poverty level. On a $160K salary, I believe this will mean about $1,800-$2,000/month in loan payments on take-home income of about $8,000/month. If you want to plan for $2,000/month in rent + utilities + internet, etc. in a city like NY or DC, that still leaves you in a good, flexible cash flow state, with $4,000/month of take-home pay left over to cover food, entertainment, unexpected/miscellaneous expenses, and savings.

Down the road, banks will typically allow borrowers, especially potentially well-qualified borrowers like young professionals, to be leveraged up to 30-35% of their pre-tax income, meaning that with the 15% loan payments, you have another 15-20% to leverage for a home mortgage and car loan. Based on the previous math (and for ease, assume you're in a city without a need for a car, like NY), that means you could take out a mortgage that carries a $2,000-$3,000/month payment, which is certainly enough to buy a bigger/nicer house/apartment/condo than you would probably need as a young lawyer in your mid to late 20s. And again, keep in mind these loan + mortgage payments only take you up to $4,000-$5,000 of your $8,000 monthly take-home pay, leaving $3,000-$4,000/month for other living expenses, entertainment, and savings while still giving you the opportunity to build up equity in some sort of home. Assuming you don't leverage yourself to death, you could certainly keep those payments down to $4,000/month total and have the other half to live fairly well and save.

All of this depends on how risk-averse you are, and how comfortable you are with betting that you'll get biglaw and survive it for at least the first few years out of law school. Of course, all this opportunity cost talk could go out the window if you get really significant scholarship money from ND or a lower T-14, because the more scholarship you get, the more it offsets the earning differential between the year off before attending law school and the lost potential salary from going straight through. My only point in this was to say that Penn at sticker is not as terrifying as some people might make it out to be, but you should still keep in mind that the debt will indeed linger for a long time. At that point, it's just a matter of managing your cash flow. Everyone always freaks about how they absolutely need to pay off the debt ASAP, and yes, you will pay more interest over the life of the loan with the cash flow approach, but you will also enjoy a better quality of life and will still be able to play it relatively conservative given your flexibility and ability to save money or pay a little extra towards your loans each month if you want. So anyway, that's my really unintentionally long two cents.


TL;DR - Penn at sticker isn't necessarily scary, but do the math, weigh your personal risk-aversion and options, and decide. Retake is a good idea, but not the only one.

You are misguided re: nature of debt, but I don't want to go into it again. There are a lot of threads discussing why $250k is unconscionable.

[northwood]

I would not go to a lawschool banking on making 160K as a first year associate

[ymmv]

I would not go to a lawschool banking on making 160K as a first year associate

That is really not an unreasonable expectation to have from the handful of law schools with strong biglaw placement. As long as you are aware that actual take-home is nowhere near $160k.

[Power_of_Facing]

Opportunity cost argument is bunko.

The prototypical associate lasts 3 to 4 years in biglaw before taking a paycut -- so whether these 3 to 4 years of 160K come at ages 27-30 or ages 29-32 (or whenever) is less relevant to total lifetime expected earnings than Penn16 posits.

Retaking for more $$$ while you still can is TCR.

[Penn16]

Opportunity cost argument is bunko.

The prototypical associate lasts 3 to 4 years in biglaw before taking a paycut -- so whether these 3 to 4 years of 160K come at ages 27-30 or ages 29-32 (or whenever) is less relevant to total lifetime expected earnings than Penn16 posits.

Retaking for more $$$ while you still can is TCR.

I apologize if my post seemed to imply that I assumed one would stay in biglaw for the long run. That is certainly not what I would want an 0L to assume in deciding what to do.

The point about how debt can/should be managed in terms of cash flow still stands, however, because with IBR, your monthly payment remains flexible with your income, so if in all likelihood you do take that pay cut after 3-4 years in biglaw, your payments will then be 15% of your new disposable income. Of course this extends the life of the loan and adds more interest over that period. But again, I don't see how this really changes the analysis with regards to managing cash flow and hence quality of life, despite the admittedly scary debt number in absolute terms.

Also, please explain why the opportunity cost argument is "bunko". I think it's perfectly valid assuming that one's post-law school career opportunities are unlikely to be different whether you choose to delay law school a year or go now. It's still a matter of current earning potential pre-law school vs. lost earning potential post-law school for that one year, especially at a school like Penn where a 160K salary as a first year associate isn't an unreasonable assumption.

[Power_of_Facing]

Also, please explain why the opportunity cost argument is "bunko". I think it's perfectly valid assuming that one's post-law school career opportunities are unlikely to be different whether you choose to delay law school a year or go now. It's still a matter of current earning potential pre-law school vs. lost earning potential post-law school for that one year, especially at a school like Penn where a 160K salary as a first year associate isn't an unreasonable assumption.

You're stating that the pre-law school earning potential of a 50K salary should be compared against a 160K post-law school salary. It should not, because regardless of whether one enters the profession at age 24 vs 25, that same person will make 160K for the same amount of time -- 3-4 years. Thus their pre-law salary should be compared against their post-paycut salary. That discrepancy alone is in most cases enough to justify retaking for more money.

Also, re IBR: http://www.nytimes.com/2012/12/15/your- ... d=all&_r=0

[Penn16]

Also, please explain why the opportunity cost argument is "bunko". I think it's perfectly valid assuming that one's post-law school career opportunities are unlikely to be different whether you choose to delay law school a year or go now. It's still a matter of current earning potential pre-law school vs. lost earning potential post-law school for that one year, especially at a school like Penn where a 160K salary as a first year associate isn't an unreasonable assumption.

You're stating that the pre-law school earning potential of a 50K salary should be compared against a 160K post-law school salary. It should not, because regardless of whether one enters the profession at age 24 vs 25, that same person will make 160K for the same amount of time -- 3-4 years. Thus their pre-law salary should be compared against their post-paycut salary. That discrepancy alone is in most cases enough to justify retaking for more money.

Also, re IBR: http://www.nytimes.com/2012/12/15/your- ... d=all&_r=0

Regarding IBR, while the tax issue might be intimidating, I wouldn't necessarily think someone should choose to delay law school by a year because of a tax burden that may be realized as far as 25 years down the road, especially given how such programs can change and no one can plan that far out.

But you make a fair point about the benchmark salaries for comparison in terms of opportunity cost. One would think, though, that with a roughly 40-45 year career ahead of you if you graduate law school at 24-25 that delaying a year would still constitute one less year to advance your legal career right at the start and earn a higher salary, even if one's time in biglaw specifically would remain unchanged. Whether it's an in-house position after biglaw, a fed gov position, or a smaller firm, the likelihood one would make more exiting biglaw than you would in your pre-law school job is still quite high. At that point it's just a matter of weighing the earning potential of where you expect yourself to be after biglaw, so I agree with you. If you get a significantly larger scholarship from a good school with good biglaw placement by retaking and waiting, then yeah, that could potentially outweigh the increased earning potential of going to law school now.

My main point was just to say that it's not necessarily as black and white as many TLSers make it out to be even in situations where someone is considering paying sticker at a place like Penn, and its still an opportunity cost analysis regardless.

[Nelson]

"Don't worry about the consequences of debt because they're 25 years away and no one can plan that far out" is terrible advice.

[Power_of_Facing]

My main point was just to say that it's not necessarily as black and white as many TLSers make it out to be even in situations where someone is considering paying sticker at a place like Penn, and its still an opportunity cost analysis regardless.

I suppose you're technically right about the decision to pay sticker being an "opportunity cost analysis."

However, I think this definition becomes far less justified when retaking to mitigate debt is an option. Yes, I'll admit that it is in fact possible for a person to pay sticker and do nicely in life -- but you have to grant me that this is contingent on everything going according to plan.

If, God forbid, a person paying sticker doesn't land biglaw or LRAP-able PI, or something happens as he or she is trying to make an exit to a different gig, etc., well then that sticker debt load has the potential to be crippling.

For reference: -- http://top-law-schools.com/forums/viewt ... 3&t=220025

To distort the late Maya Angelou, "If going to law school to work in biglaw is painful, massive student debt is the rust on the razor that threatens the throat. It is an unnecessary insult."

Whatever potential benefits may be derived from not waiting a year and paying sticker, they are (for the vast majority of non-wealthy young people) dramatically outweighed by the corresponding risks.

It is absolutely helpful to 0Ls considering these sorts of issues to confront a TLS hivemind that opposes large debt and encourages people to do everything in their power to make law school something less fraught than a 10-to-25-year tightrope walk over an economic abyss. The black and white perception, right or wrong, is useful.

[Penn16]

"Don't worry about the consequences of debt because they're 25 years away and no one can plan that far out" is terrible advice.

Which is why no one, including myself, suggested anything even remotely like that. As the NY Times article Power_of_Facing posted says, though, "worries about a tax bill a couple of decades from now shouldn’t scare you away..."

And Power_of_Facing, you're absolutely right that an 0L shouldn't just assume that biglaw and other exit options will go as planned. And a sticker-size debt load can obviously become very onerous as life plans change for better or for worse. I just wanted to show a rough sketch of how it could be doable in the first several years out of school, especially from schools like Penn with strong biglaw placement. If retaking and waiting can get an 0L into a school with strong biglaw placement and a scholarship large enough to counterbalance the lost post-biglaw earning potential, then they should retake and wait. That simple. I just think TLS sometimes ignores that depending on how much scholarship one can reasonably expect to get, it actually might make just as much, or more, financial sense not to wait. Again, it all comes down to personal risk-aversion, cost-benefit analysis, and intangibles. Black and white is helpful, but so is nuance.

[BigZuck]

"Don't worry about the consequences of debt because they're 25 years away and no one can plan that far out" is terrible advice.

Which is why no one, including myself, suggested anything even remotely like that. As the NY Times article Power_of_Facing posted says, though, "worries about a tax bill a couple of decades from now shouldn’t scare you away..."

And Power_of_Facing, you're absolutely right that an 0L shouldn't just assume that biglaw and other exit options will go as planned. And a sticker-size debt load can obviously become very onerous as life plans change for better or for worse. I just wanted to show a rough sketch of how it could be doable in the first several years out of school, especially from schools like Penn with strong biglaw placement. If retaking and waiting can get an 0L into a school with strong biglaw placement and a scholarship large enough to counterbalance the lost post-biglaw earning potential, then they should retake and wait. That simple. I just think TLS sometimes ignores that depending on how much scholarship one can reasonably expect to get, it actually might make just as much, or more, financial sense not to wait. Again, it all comes down to personal risk-aversion, cost-benefit analysis, and intangibles. Black and white is helpful, but so is nuance.

Telling a 4.0/low 160 bro "Just do sticker bro" is ridiculous advice and you should feel ridiculous. I get that you've devoted walls of text to the supposed opportunity cost argument so it probably feels like you've made a strong stand against the hivemind. But no. Just no. In one year he can make like 150K and mitigate some of the worst case scenarios. And he should. The legal market is rough.

It's irresponsible to say stuff like this just cuz of your own agenda against the hivemind dude.

[rickgrimes69]

Telling a 4.0/low 160 bro "Just do sticker bro" is ridiculous advice and you should feel ridiculous.

[Penn16]

"Don't worry about the consequences of debt because they're 25 years away and no one can plan that far out" is terrible advice.

Which is why no one, including myself, suggested anything even remotely like that. As the NY Times article Power_of_Facing posted says, though, "worries about a tax bill a couple of decades from now shouldn’t scare you away..."

And Power_of_Facing, you're absolutely right that an 0L shouldn't just assume that biglaw and other exit options will go as planned. And a sticker-size debt load can obviously become very onerous as life plans change for better or for worse. I just wanted to show a rough sketch of how it could be doable in the first several years out of school, especially from schools like Penn with strong biglaw placement. If retaking and waiting can get an 0L into a school with strong biglaw placement and a scholarship large enough to counterbalance the lost post-biglaw earning potential, then they should retake and wait. That simple. I just think TLS sometimes ignores that depending on how much scholarship one can reasonably expect to get, it actually might make just as much, or more, financial sense not to wait. Again, it all comes down to personal risk-aversion, cost-benefit analysis, and intangibles. Black and white is helpful, but so is nuance.

Telling a 4.0/low 160 bro "Just do sticker bro" is ridiculous advice and you should feel ridiculous. I get that you've devoted walls of text to the supposed opportunity cost argument so it probably feels like you've made a strong stand against the hivemind. But no. Just no. In one year he can make like 150K and mitigate some of the worst case scenarios. And he should. The legal market is rough.

It's irresponsible to say stuff like this just cuz of your own agenda against the hivemind dude.

Thank you for that unnecessarily rude and condescending reply. Really makes Penn people look nice. It also adds a lot to the discussion when you throw out presumptions like "in one year he can make like 150K" while simultaneously accusing me of trying to indoctrinate 0Ls with "ridiculous" or unreasonable expectations. My whole point was just that the very assumption you just tossed out, that one should expect to get that kind of money by taking the LSAT for the third or even fourth time, may not always be very reasonable, and that should factor into one's financial analysis of law school. Yeah, retaking is the right answer in most cases, including potentially OP's, and in fact if you had actually read my last post you would have seen that I already said that: "If retaking and waiting can get an 0L into a school with strong biglaw placement and a scholarship large enough to counterbalance the lost post-biglaw earning potential, then they should retake and wait." So I certainly don't have my own "agenda against the hivemind", and you should probably just chill and learn to communicate like a normal adult.

[ymmv]

Telling a 4.0/low 160 bro "Just do sticker bro" is ridiculous advice and you should feel ridiculous.

[03152016]

Telling a 4.0/low 160 bro "Just do sticker bro" is ridiculous advice and you should feel ridiculous.

[BigZuck]

Look bro, just cuz you decided to pay sticker at Penn doesn't mean you have to be a man on a mission to create even more sticker bros.

[Penn16]

Look bro, just cuz you decided to pay sticker at Penn doesn't mean you have to be a man on a mission to create even more sticker bros.

Lol go ahead, "bro", and assume all you want. You have literally zero information and apparently can't read, either. So good for you, keep up the good work.

[03152016]

OP is the same OP from this thread: http://www.top-law-schools.com/forums/v ... 1&t=231395
wherein we spend a good chunk of five pages discussing penn at sticker
idk why we're relitigating this thing

op is the literal definition of someone who should retake. he's a a) k-jd, b) heavy reverse-splitter who has stated that he's c) uninterested in biglaw, and is now d) facing sticker even though he is e) eligible to retake f) the test he underprepared for.

jesus i want to say what i really think about you penn16 but i know the mods will ban me

[Penn16]

OP is the same OP from this thread: http://www.top-law-schools.com/forums/v ... 1&t=231395
wherein we spend a good chunk of five pages discussing penn at sticker
idk why we're relitigating this thing

op is the literal definition of someone who should retake. he's a a) k-jd, b) heavy reverse-splitter who has stated that he's c) uninterested in biglaw, and is now d) facing sticker even though he is e) eligible to retake f) the test he underprepared for.

jesus i want to say what i really think about you penn16 but i know the mods will ban me

Well aren't you just a charming, illiterate fellow, just like BigZuck. Let's try something. To help you out a bit, I'll once again repeat what I said earlier, word for word, but this time with the important parts in bold: "If retaking and waiting can get an 0L into a school with strong biglaw placement and a scholarship large enough to counterbalance the lost post-biglaw earning potential, then they should retake and wait. That simple." Alright, now give that a shot and have a good night.

[03152016]

.

[MrSebastian]

This:

http://www.quickmeme.com/meme/3p86ua