Top Law Schools

This may seem like a ridiculous question. However, I am an 0L applying to schools this cycle and naturally thinking about what I want to do with my law degree. BigLaw is work that most people do not enjoy, and personally I don't necessarily see myself as someone who would be an exception. Government work (stuff like DA offices, DOJ, USAO, etc) seems to appeal to me the most. However, the prospect of making like 1/3 of the money while having loans seems pretty prohibitive. I was curious HOW different the take-home pay is, though, so I crunched some numbers.

Let's assume that Person A gets a BigLaw job in NYC for 160,000 a year. Person B gets a job as a DOJ attorney (extremely hard to get, I know, but other jobs don't change the calculation much) in DC paying 60,000 and lives in Northern VA. Both of these students went to Harvard Law (and thus are eligible for Harvard's loan repayment. I assume this because Harvard has an easy to use calculator for loan payment). Both students graduate with 200,000 in debt. This is slightly less than the 217,800 estimated cost for 3 years because we assume that a 2L summer paid off some of it.

Person A is going to pay a lot in taxes. I'm certainly no tax expert, but it seems to me that with NYC and State taxes used as a deduction, this person will pay 32,823 in Federal income tax. They will pay 16,280 between NYC and NY State income tax. Social Security tax will take away another 6,324 and Medicare will take 2,320. This leaves 102,253 post tax.

In a BigLaw job, Person A will be responsible for paying off their loans entirely. This amounts to 28,488 a year. This leaves 73,766 left after taxes and loans. Pretty solid.

Person B will pay much less in taxes. He/she will pay 8,750 in Federal income tax, 3,450 in VA state tax, 3,720 for Social Security tax, and 870 for Medicare tax. This amounts to 43,210 after tax.

This person will enroll in Harvard LIPP program and pay 2,840 in student loans for the first year. This means 40,370 in disposable income.

So we see 73,766 compared to 40,370. The gap certainly doesn't seem as high as before. And really, the gap is much smaller than it even seems. The cost of living in NYC is so much higher than living in the DC Metro area (already a relatively expensive area itself. I was being kind to BigLaw to have DC be the example of where a PI person works). There are various cost of living calculators online; I chose randomly to use this one:

http://www.bankrate.com/calculators/sav ... lator.aspx

If you put in 40,370 in the Washington Metro Area, it is listed as the equivalent to 62,428 in income in Manhattan. There's certainly not that much of a difference between 73,766 and 62,428.

And honestly, the comparison could look a lot more ridiculous. For instance, someone who decides to work in the State Attorney's office near Tampa, FL (random choice; I don't even think this is the best example) would start out making 40,000. With no state income tax and no student loan costs due to low income, this person will end up with 32,790 after tax. According to that website, that is the equivalent of 76,802 in Manhattan!

Now there are a few things I think people will argue about this:

1. Some people who work BigLaw don't actually live in Manhattan; many of them live in NJ or Brooklyn. However, I am under the impression that the majority of NYC BigLaw associates live in Manhattan because BigLaw hours + a commute is too much. I might be wrong in that assumption though.

2. Not everyone works in NYC for BigLaw. This is certainly true, and in cheaper areas that also pay 160,000, one is getting a much better deal. Those jobs also tend to be a lot harder to get though (think: it's much more difficult to land DC biglaw than NYC). I think once must assume that if their aspiration is BigLaw at 160k that it will probably end up being in NYC.

3. People in BigLaw get raises. This is true. A fifth year associate might make 230,000 a year instead of 160,000. However, a lot of that increase in income will be taxed away. Meanwhile, the government worker will be getting frequent raises too. It should generally even out. In the end, a gov attorney will max out at like 155,000 in DC, which is equivalent to 240,000 in Manhattan. Accounting for higher income taxation of the BigLaw person and NY taxes in general, you're looking at living standards roughly equivalent to very senior associates or non-equity partners. The difference is, that gov attorney job is secure, while most people won't even make it to the senior associate/non-equity partner level; they'll end up with a lateral move to a lower paying job.

4. Eventually the BigLaw guy stops paying student loans so that goes away and his discretionary income skyrockets. This is true to some degree. However, the loans stay for 10 years. Most people won't stay at their BigLaw job for 10 years. It is worth saying, though, that someone lucky enough not to have much debt (such as those with large merit scholarships) can definitely outpace PI by going BigLaw because they won't be having to spend like 25,000 more on loans each year.

What about big law bonuses?

boosk wrote:What about big law bonuses?

Aren't those generally only like 7,000, all being taxed at the highest marginal tax rate? I suppose that ends up being 4,000 extra dollars which is nothing to sneeze at, but it doesn't markedly change anything in this thread unless you're at a firm like Wachtell that does significantly higher bonuses. Those firms are rare and extremely selective, though, so you can't just assume you'll get a job at one of them.

Your analysis proves that doing pretty any thing is better than NYC biglaw. You are spot on.

However, for those not interested in NYC biglaw, the private sector lawyers walk away with significantly more money. For instance, compare someone who gets a job in Tampa biglaw making $110k to the state attorney. Even after student loans and taxes, this person has almost twice the disposable income as the state attorney. That's huge. Now move over to Miami, where cost of living is higher but the state attorney makes about the same but the biglawyer gets a job at Boies and makes $174k + massive bonus. Not even close.

Student loans at sticker will account for about a $30k discrepancy between private sector and public sector, assuming the school has a good LRAP. Then taxes will account for another bit, although the marginal federal tax rates should not be more than 15% different in that range. If you compare within the same market and control for state taxes and cost of living, the biglaw attorney almost always comes away with a lot more money.

New York City is the stark exception, but New York City is a miserable place for everyone. The biglawyer in NYC will still make noticeably more than the PI lawyer there, but in NYC they're both dirt poor.

Correct response is to find a spouse that will help pay for loan debt and other expenses. Regardless of where you live.

This proves that the cost of living in a market makes a big difference in the value of an income dollar. A better comparison would be to compare PI and Biglaw in the same market. Also, most schools don't have a loan repayment plan as generous as Harvard's. And if you are looking at a career in one or the other (I know most people leave Biglaw after a few years), the potential for earning is much higher in biglaw than in PI, because PI salaries are usually capped below $200,000. A good plan would be to start in PI, pay off loans with repayment assistant plan, then transfer as a partner into Biglaw. Bam!

And the answer above me is TCR.

There are somethings that are right and wrong about your analysis. Off the top of my head:

1. Not all LRAP programs are as generous as Harvard's (I'd imagine Harvard's is one of the most generous so it's not really a fair comparison).

2. As you noted stuff like the DoJ/USAO don't hire fresh grads, but the real kicker is that a lot of state/local governments have hiring freezes or, if they do hire, they hire very few.

3. Most LRAP programs dovetail with IBR/PSLF. This means that you need to work in public interest for 120 months to see your loans wiped out which causes some issues:

3a. You won't be making any headway on your loans (in fact with many of them your loan amounts will likely be growing).
3b. You can't switch out of a PSLF qualifying job since you will be fucked with regards to debt.
3c. It could be an issue if you lose your job and can't find another PSLF qualifying job. Basically there is some risk involved with relying on LRAP since it's all or nothing in regards to wiping out your debt.

Honestly you shouldn't really be choosing firm versus pi based on what is a "better return" on your money. Choose the one that you would rather do.

I think there is nothing wrong with using NYC biglaw as comparison. I'm not saying everyone wants NYC biglaw but if you are paying sticker and want firm work it should really be something you think about since there are so many more biglaw jobs there compared to anywhere else.

Anonymous User wrote:Correct response is to find a spouse that will help pay for loan debt and other expenses. Regardless of where you live.

This is entirely TCR. My wife is a teacher, so she doesn't even get paid very well, but she covers cost of living which when combined with my lack of need for summer money will knock about $70k - $80k off the cost of law school. Then when you get out of school, even with some student loan payments, a family income of $205k is nothing to sneeze at. Or you easily afford to take a job in a smaller, lower-paying, lower-billable-hours-requirement market and still bring in $150k.

bk187 wrote:I think there is nothing wrong with using NYC biglaw as comparison. I'm not saying everyone wants NYC biglaw but if you are paying sticker and want firm work it should really be something you think about since there are so many more biglaw jobs there compared to anywhere else.

Yes, but NYC biglaw is comparatively much easier to get than DC bigfedgov. If you could get DC bigfedgov, you could probably also get DC biglaw, which by OP's analysis would be much more lucrative than NYC biglaw. You should at least limit the comparison to the same city.

duckmoney wrote:

bk187 wrote:I think there is nothing wrong with using NYC biglaw as comparison. I'm not saying everyone wants NYC biglaw but if you are paying sticker and want firm work it should really be something you think about since there are so many more biglaw jobs there compared to anywhere else.

Yes, but NYC biglaw is comparatively much easier to get than DC bigfedgov. If you could get DC bigfedgov, you could probably also get DC biglaw, which by OP's analysis would be much more lucrative than NYC biglaw. You should at least limit the comparison to the same city.

Well using the DoJ as an example was misleading. I think a fairer comparison would be NYC biglaw versus any PSLF qualifying legal job. I still don't agree that comparison needs to be limited to the same city. Though I am going to reiterate that I think it's stupid to compare this 2 careers based on earning potential (I think LRAP brings them close enough in line with each other).

bk187 wrote:

duckmoney wrote:

bk187 wrote:I think there is nothing wrong with using NYC biglaw as comparison. I'm not saying everyone wants NYC biglaw but if you are paying sticker and want firm work it should really be something you think about since there are so many more biglaw jobs there compared to anywhere else.

Yes, but NYC biglaw is comparatively much easier to get than DC bigfedgov. If you could get DC bigfedgov, you could probably also get DC biglaw, which by OP's analysis would be much more lucrative than NYC biglaw. You should at least limit the comparison to the same city.

Well using the DoJ as an example was misleading. I think a fairer comparison would be NYC biglaw versus any PSLF qualifying legal job. I still don't agree that comparison needs to be limited to the same city. Though I am going to reiterate that I think it's stupid to compare this 2 careers based on earning potential (I think LRAP brings them close enough in line with each other).

That's a bit more reasonable. The $40k / yr job in Tampa is probably a better example of a PSLF job than the DoJ.

I thought the whole point of OP's post was to analyze the earning potential of PSLF jobs compared to biglaw jobs, and see just how much LRAP brings them in line with each other. If he wants to argue that being a state attorney in Tampa won't leave you that much poorer than being a slave biglawyer in New York, he's probably right, and I'm glad he crunched some numbers to show us. If he wants to argue that being a state attorney is Tampa is better than working for one of the good, six-figure paying firms in the skyscrapers across from the courthouse, then he's just being silly.

This doesn't make sense at all because after 10 years, the biglawyer is either a partner banking 500k+ or has exited somewhere and is banking 150-200k and has no loans. This isn't even a contest, unless the PI person laterals into a firm after 10 years. Also, compare apples to oranges much?

Is nobody seriously calling this guy out for being an 0L and neglecting raises/bonuses while assuming PI = DOJ and easy to get?

duckmoney wrote:

bk187 wrote:

duckmoney wrote:

bk187 wrote:I think there is nothing wrong with using NYC biglaw as comparison. I'm not saying everyone wants NYC biglaw but if you are paying sticker and want firm work it should really be something you think about since there are so many more biglaw jobs there compared to anywhere else.

Yes, but NYC biglaw is comparatively much easier to get than DC bigfedgov. If you could get DC bigfedgov, you could probably also get DC biglaw, which by OP's analysis would be much more lucrative than NYC biglaw. You should at least limit the comparison to the same city.

Well using the DoJ as an example was misleading. I think a fairer comparison would be NYC biglaw versus any PSLF qualifying legal job. I still don't agree that comparison needs to be limited to the same city. Though I am going to reiterate that I think it's stupid to compare this 2 careers based on earning potential (I think LRAP brings them close enough in line with each other).

That's a bit more reasonable. The $40k / yr job in Tampa is probably a better example of a PSLF job than the DoJ.

I thought the whole point of OP's post was to analyze the earning potential of PSLF jobs compared to biglaw jobs, and see just how much LRAP brings them in line with each other. If he wants to argue that being a state attorney in Tampa won't leave you that much poorer than being a slave biglawyer in New York, he's probably right, and I'm glad he crunched some numbers to show us. If he wants to argue that being a state attorney is Tampa is better than working for one of the good, six-figure paying firms in the skyscrapers across from the courthouse, then he's just being silly.

Yeah, my point was specifically about NYC BigLaw. Obviously within one individual market, people in law firms will make more money and have a higher standard of living than people in PI in that same area. LRAP and progressive taxation will make it closer than the initial salary figures appear, but the difference will still be there and be significant.

But that is generally not the choice being made by people at top law schools. A huge portion of people at top law schools, especially those located near the Northeast, only realistically consider BigLaw in NYC (or at least that's my impression; I'm just an 0L). This thread is meant to call that decision into question. Yeah, there are some people who genuinely like BigLaw jobs, and for them, a job in NYC will be a job they like with a marginally higher standard of living than most PI jobs. But I think for a lot of people, an NYC BigLaw job is taken because of some impression that the money is too good to turn down even though the job itself is awful. I think, based on the calculations in this thread, that logic is silly.

c3pO4 wrote:This doesn't make sense at all because after 10 years, the biglawyer is either a partner banking 500k+ or has exited somewhere and is banking 150-200k and has no loans. This isn't even a contest, unless the PI person laterals into a firm after 10 years. Also, compare apples to oranges much?

Is nobody seriously calling this guy out for being an 0L and neglecting raises/bonuses while assuming PI = DOJ and easy to get?

1. For the person who makes partner, obviously BigLaw is more lucrative (although I think that can be called into question for those non-equity partners only pulling slightly above senior associate salary). However, those people are by far the minority when it comes to BigLaw. I would wager that most people do not have aspirations to be a partner, and most of the people who do will not actually achieve it.

2. Banking 150-200k elsewhere? I admit I am not particularly knowledgeable on this stuff, but it was my impression that lateral moves (such as in-house jobs) pulled more like 100-150k than 150-200k. And even if they don't, a federal gov employee can be making 120-160k in a cheaper area, so the BigLaw guy is really not at all better off still.

3. I didn't really neglect bonuses. I thought about listing it in my OP, but I felt like the OP was already pretty long. I addressed it in my first reply though. Bonuses at all but the most selective firms amount to like 7000 dollars that will be taxed at the highest marginal rate. You'll end up with 4000 dollars extra. Nothing to sneeze at, but it doesn't change the result of the thread very much. Bonuses in later years might change things a little bit, but I have also chosen to ignore benefits of government jobs such as health care and retirement benefits that biglaw lawyers don't get. These sorts of things tend to equal out.

4. I actually SPECIFICALLY said that DOJ is not easy to get in my original post, so it's unclear to me why you are acting like I don't realize that. DOJ is definitely hard to get, but there are tons of roughly equivalent government jobs for the purposes of these calculations. If anything, taking a 60000 salary that still has to pay loan money while in a relatively expensive market made biglaw look better in comparison than it would if stacked up against an easier government job to get that pays marginally less but also pays less loans and is in a less expensive area.

Yes. It is much more lucrative and trying to spin the numbers to make them comparable salary wise is foolishness. There's a reason why most people who come to law school, even those with huge scholarships, dead set on PI forget about that and chase firm jobs by the halfway point of 1L.

As an initial point, I don't know why you would compare DC PI to NYC BigLaw. You are biasing the results by comparing two cities with different costs of living. It's true that most BigLaw is in NYC, but there's plenty of BigLaw jobs in DC, too, just as there are plenty of PI jobs in NYC. Pick one city and go with it.

Anyway, I will say this. I went to law school vaguely intending to do public interest work. As a 0L I had the same intuition as you about LRAP making non-profit or government work close enough in compensation to BigLaw. The reality is different, though.

First, BigLaw jobs are easier to get, at least if you have decent grades at a top school. Being at NYU, the choice for me was really, do I want to have something relatively locked up at the start of my 2L year, or do I want to be scrambling after graduation to find a job with organizations that are facing huge budget cuts? You have to be really committed to want to do the latter. It's a huge amount of extra stress.

Second, ten years is a LONG TIME to have to keep a low-paying PI job. You are basically fucked if you have to make $1500+ a month loan payments after getting laid off, changing careers, quitting to take care of family issues, or so on, after, say, seven years. Also, if you marry someone with a significant income, you may no longer qualify for your school's LRAP and have to make those payments out of pocket. It's just a really long time to have the debt hanging over your head, and again, I would argue, only worth it if you are really committed to the area of the law you're pursuing.

I do think that your central intuition is correct—that the difference in take-home pay between PI and BigLaw for someone with large debts will be smaller than it's often made out to be. It's just all these other considerations that really make LRAP not that attractive.

Yeah, assuming 200k loans, a 60k PI job with LIPP might leave you with buying power in VA that starts to approach that of a first-year associate in Manhattan. However, it's kind of ridiculous to extrapolate from this any kind of general statement that "Biglaw is not much more lucrative than PI."

For starters, you can't use Harvard LIPP as a baseline for comparing PI vs. Biglaw. It's extremely generous compared to IBR (which in your hypo would probably require more like 6k/year contribution).

Also, for the same reasons mentioned by other posters, you can't compare across markets to support this kind of proposition. A lot of jobs are objectively better than NYC Biglaw (including Biglaw in other markets), but assuming people have options they choose NYC Biglaw for prestige, exit options, and the utility of living/working in Manhattan.

Finally you forgot bonuses. They follow lock-step increases just like salary and even the extremely low bonuses ITE would make a difference in your numbers.

Your mistake is once again this TLS notion that getting a 60k Public interest job not just in DOJ but ANYWHERE is a walk in the park. Unless the person is top 5% or so (even at Harvard), everything is probably out. Even DA and PD offices are receiving around 200-1000 applications per hire and routinely rejecting top 14 candidates from minimum wage/ Unpaid internships.

A more realistic analysis as even an average Harvard student would be getting 30k out of school (of course on a year job), but the more likely scenario is zero. I've had multiple friends replaced from volunteer gov externships because top law school grads were willing to work FULL TIME for FREE just to not have a resume gap.

TLDR Whatever NYC is after taxes and COL >>>>>>>>>>>>> 0/Minimum wage/Temporary Employment.

concurrent fork wrote:the utility of living/working in Manhattan.

What do you mean by this exactly?

lessthanjake wrote:

c3pO4 wrote:This doesn't make sense at all because after 10 years, the biglawyer is either a partner banking 500k+ or has exited somewhere and is banking 150-200k and has no loans. This isn't even a contest, unless the PI person laterals into a firm after 10 years. Also, compare apples to oranges much?

Is nobody seriously calling this guy out for being an 0L and neglecting raises/bonuses while assuming PI = DOJ and easy to get?

1. For the person who makes partner, obviously BigLaw is more lucrative (although I think that can be called into question for those non-equity partners only pulling slightly above senior associate salary). However, those people are by far the minority when it comes to BigLaw. I would wager that most people do not have aspirations to be a partner, and most of the people who do will not actually achieve it.

2. Banking 150-200k elsewhere? I admit I am not particularly knowledgeable on this stuff, but it was my impression that lateral moves (such as in-house jobs) pulled more like 100-150k than 150-200k. And even if they don't, a federal gov employee can be making 120-160k in a cheaper area, so the BigLaw guy is really not at all better off still.

3. I didn't really neglect bonuses. I thought about listing it in my OP, but I felt like the OP was already pretty long. I addressed it in my first reply though. Bonuses at all but the most selective firms amount to like 7000 dollars that will be taxed at the highest marginal rate. You'll end up with 4000 dollars extra. Nothing to sneeze at, but it doesn't change the result of the thread very much. Bonuses in later years might change things a little bit, but I have also chosen to ignore benefits of government jobs such as health care and retirement benefits that biglaw lawyers don't get. These sorts of things tend to equal out.

4. I actually SPECIFICALLY said that DOJ is not easy to get in my original post, so it's unclear to me why you are acting like I don't realize that. DOJ is definitely hard to get, but there are tons of roughly equivalent government jobs for the purposes of these calculations. If anything, taking a 60000 salary that still has to pay loan money while in a relatively expensive market made biglaw look better in comparison than it would if stacked up against an easier government job to get that pays marginally less but also pays less loans and is in a less expensive area.

w/r/t point 2, Robert Half Legal (http://www.roberthalflegal.com/SalaryCe ... =startover) estimates that corporate in-house attorneys with 4-9yrs experience make between 135k-260k (with a midpoint of 197k) in Manhattan, while attorneys with 10-12yrs experience make between 184k-318k (with a midpoint of 251k) in Manhattan.

As an initial point, I don't know why you would compare DC PI to NYC BigLaw. You are biasing the results by comparing two cities with different costs of living. It's true that most BigLaw is in NYC, but there's plenty of BigLaw jobs in DC, too, just as there are plenty of PI jobs in NYC. Pick one city and go with it.

I dont think it biases the results. NYC is the primary place where people get BigLaw jobs. DC is the primary place where people get government PI jobs. So if your sights are set on BigLaw, chances are you'll get that job in a place with a massive CoL, but if your sights are set on gov PI, chances are you'll get a job in a place with a lesser CoL. This has to be factored in when thinking about the differing salaries.

The point of this was never to argue that PI in NYC is similar monetarily to NYC BigLaw. The point was that the typical NYC BigLaw job is not necessarily significantly more lucrative than the typical PI job. One of the main reasons for this is precisely that the typical PI job is NOT in NYC.

..

lessthanjake wrote:The point of this was never to argue that PI in NYC is similar monetarily to NYC BigLaw. The point was that the typical NYC BigLaw job is not necessarily significantly more lucrative than the typical PI job. One of the main reasons for this is precisely that the typical PI job is NOT in NYC.

I'm sorry to say that you're quite mistaken about what is a typical PI job if you think it's working for the federal government in DC.

lessthanjake wrote:

As an initial point, I don't know why you would compare DC PI to NYC BigLaw. You are biasing the results by comparing two cities with different costs of living. It's true that most BigLaw is in NYC, but there's plenty of BigLaw jobs in DC, too, just as there are plenty of PI jobs in NYC. Pick one city and go with it.

I dont think it biases the results. NYC is the primary place where people get BigLaw jobs. DC is the primary place where people get government PI jobs. So if your sights are set on BigLaw, chances are you'll get that job in a place with a massive CoL, but if your sights are set on gov PI, chances are you'll get a job in a place with a lesser CoL. This has to be factored in when thinking about the differing salaries.

The point of this was never to argue that PI in NYC is similar monetarily to NYC BigLaw. The point was that the typical NYC BigLaw job is not necessarily significantly more lucrative than the typical PI job. One of the main reasons for this is precisely that the typical PI job is NOT in NYC.

So ignorant. NYC biglaw is not the "typical" private practice job. Also, saying most biglaw jobs are in NYC is meaningless and stupid. Most people are considering biglaw vs PI in the same city, and most PI is not DOJ while most biglaw is similar. You have convinced nobody of anything.