A cautionary tale for prospective law students told through graphs

It’s that time of year again, when students all over the country are starting to apply to law school.  I interview a lot of prospective law students as part of some outreach and admissions programs at my law school, and every year I end up writing about the risks of going to law school.  The number of LSAT takers has jumped a whopping 20.5% over the past two years, and yet as Slate.com reported last week, a legal career has never been less of a sure bet.

This time thought I would take a more personal approach to the question of whether law school is the right choice for a young LDS student.  Most of this information applies to anyone considering law school, but there are a few Mormon-specific practices that merit specific mention.  I want to look at the raw financial reality imposed by law school debt, and I’m going to use my own finances as an example.  Obviously, these figures vary from school to school and region to region, but I think individual numbers are instructive.

The bar graph below represents my total expenditures for one year, from November 1, 2009, to October 31, 2010.  I have excluded any specific dollar amounts, but you can see the general ratios of expenses fairly clearly.

My family spending for one year

Education is by far my family’s largest single expense. Specifically, student loan payments.  That means that 37% of our total spending goes toward paying for law school from several years ago.  By comparison, our combined expenses for rent, home, and utilities costs was only 25% of our expenditures.  The next largest category at 11% is Gifts and Donations, the majority of which is tithing and fast offerings.  Food is 9%, and auto/transportation costs are only 4%.  All of these numbers are a bit skewed because most of our healthcare costs are taken out of my paycheck pre-tax, and consequently don’t show up in these graphs. (I used Mint.com to aggregate and graph the data.) But it’s safe to say that my student loans are well over a third of our expenses.

I am one of the lucky ones.  I got a job after graduation, and I love what I do.  I have no complaints there.  And financially speaking, our situation is likely to only improve over time.  But the numbers don’t lie, and they’re pretty sobering.  Even after years of repayment, I still have six figures of debt.  We’re still not sure when we’ll be able to buy a home and start building some equity because I already have the functional equivalent of a mortgage, without a house to show for it.

Some of these financial pressures can have a larger impact on Mormon law students or young lawyers.  The practice of paying tithing can significantly reduce discretionary income for LDS families.  Tithing may be only 10%, but if a quarter or a third if your income is spent on student loans, tithing represents a much larger portion of your budget.  LDS students or young lawyers also frequently have higher child costs due to their tendency to have more children at a younger age than the average American.  And if an LDS family wants to maintain a single source of income so one parent can stay home with the kids, that can add additional strain.

These financial factors relate directly to quality of life issues.  Many law students feel pressured to take the highest paying job the can find so they can pay off their debt, even if that job is not where they want to live or not in a practice area they prefer.  Government jobs or small firm jobs, which offer high job satisfaction but tend to pay less, may not be an option for someone with very high student debt.  I took a job at a firm that paid a bit less than other firms in my region, because I liked the people and I liked the work.  But for other law grads in more expensive markets, that may not be an option.

When I interview students applying to law school, I often ask them if they are really sure they want to be lawyers.  Sometimes they are surprised by my question, but I think every student should think long and hard before going into a lot of debt for law school or similar educational expenses.  It isn’t that I don’t think education is worthwhile—it is.  But I also think the higher education bubble has reached absurd proportions, and a lot of professional degrees aren’t the guaranteed ticket to financial success people think they are (if that was every the case).  Law schools are frantically trying to hide their graduates’ unemployment numbers, but most reports seem to indicate that only about two-thirds of recent law school graduates have a permanent job, much less a lucrative one that would allow them to easily pay their loans back on time.

If you want to go to law school because you like legal work and think it’s interesting, then by all means, carry on.  But if you just don’t know what you want to do with your life and think law school sounds fun, think again.  Sometimes it’s not fun at all, and it may force you to work in a field or firm that you don’t enjoy, just to pay back your education costs.  If you are certain you want to attend law school, I definitely recommend taking tuition costs into consideration when you look at schools.  A diploma from a top-20 school doesn’t guarantee you a job anymore, so you may be better off going to a local state school.  And being a lawyer may not be that lucrative in the future.  The legal profession is undergoing some fairly radical changes right now in terms of hiring and billing practices, and salaries are frozen or falling.  If you’re in it for the money, I’d try being a banker before I went to law school.

If you disagree with my assessment or have other statistical/anecdotal evidence, I’d like to hear it.  But as long as students and lawyers are seriously thinking and talking about the financial realities of law school, I’m happy.

Also, if I haven’t demoralized enough prospective law students, check this video out.  It’s been making the rounds at firms and law schools, but it might do more good if it went viral among pre-law undergrads.