Law school as an investment

November 16, 2009
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Should the decision of whether or not to go to law school be made just as one would when deciding what stocks to buy for their 401k or invest in an IRA? Professor Herwig Schlunk at Vanderbilt University Law School thinks so.

In his 12-page working paper, he sets up three scenarios of law students and whether or not it’s worth it for them to spend the money on a law degree. He’s got the Also Ran who got above average grades in a relatively nonmarketable major from a middle-of-the-pack school for his undergraduate degree. This person would get into a second or third rate law school and has little chance of landing a “big law” job. The Solid Performer got relatively good grades in a relatively marketable major from a better school and will make it into a low first- or high second-rate law school. The Solid Performer also has a better chance of landing a job at a big law firm.

Finally, Schlunk introduces us to Hot Prospect, who as the name suggests, got stellar grades in a very marketable major from a highly ranked school and will attend a first-rate law school and should land the big law job.

After going on about opportunity costs, investments, lost non-legal salaries, and throwing around other hypothetical numbers, Schlunk concludes the Also Rans shouldn’t bother to go to law school because it’s not a good investment. Solid Performers should think hard before choosing to become a lawyer and, Hot Prospects should have little qualms about investing in a J.D.

Of course, everyone’s experiences will be different, and if you are an Also Ran who happened to score grants or scholarships, then by all means go to law school.

Schlunk’s paper highlights a downside of law school: the costs and the time it takes to recoup the money you spent to get your degree. Law school has always been thought of as a fallback in case you don’t make it as a writer or you find out teaching just isn’t for you. But with the number of people in law school now, the shrinking number of jobs, and the bleak outlook on the immediate horizon, perhaps looking at going to law school as an investment will help some decide whether it’s right for them.

Of course, those who have a passion for the law would become attorneys regardless, but those on the fence may be better served by thinking of it in these terms.

You can read the paper through a link on the Wall Street Journal’s Law Blog, if you don’t want to download the paper. The link provided in the paper to view it online actually goes to a securities paper, which wouldn’t be very helpful for today’s post.
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  • In other words, the legal profession is 100% about money. That, of course, is what its critics have long believed and said.
  • Trust a professor from Vanderbuilt to assume that a job in Big Law is the ultimate goal for every person entering law school. No doubt there are a number of folks who long for a position in a Big Firm. But, there will always be those who look for other things: public service, careers with family lives, helping those who can\'t pay Big Law fees, alternative legal careers, etc., etc., etc.

    Law School IS an investment. But, what you invest and how that investment pays mean something different to everyone. To suggest otherwise is the research equivalent to basing a brief on a statute without ever having checked the pocket part: looks the part but too shallow to be meaningful.

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  1. The $320,000 is the amount the school spent in litigating two lawsuits: One to release the report involving John Trimble (as noted in the story above) and one defending the discrimination lawsuit. The story above does not mention the amount spent to defend the discrimination suit, that's why the numbers don't match. Thanks for reading.

  2. $160k? Yesterday the figure was $320k. Which is it Indiana Lawyer. And even more interesting, which well connected law firm got the (I am guessing) $320k, six time was the fired chancellor received. LOL. (From yesterday's story, which I guess we were expected to forget overnight ... "According to records obtained by the Journal & Courier, Purdue spent $161,812, beginning in July 2012, in a state open records lawsuit and $168,312, beginning in April 2013, for defense in a federal lawsuit. Much of those fees were spent battling court orders to release an independent investigation by attorney John Trimble that found Purdue could have handled the forced retirement better")

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  4. I'm currently seeing someone who has a charge of child pornography possession, he didn't know he had it because it was attached to a music video file he downloaded when he was 19/20 yrs old and fought it for years until he couldn't handle it and plead guilty of possession. He's been convicted in Illinois and now lives in Indiana. Wouldn't it be better to give them a chance to prove to the community and their families that they pose no threat? He's so young and now because he was being a kid and downloaded music at a younger age, he has to pay for it the rest of his life? It's unfair, he can't live a normal life, and has to live in fear of what people can say and do to him because of something that happened 10 years ago? No one deserves that, and no one deserves to be labeled for one mistake, he got labeled even though there was no intent to obtain and use the said content. It makes me so sad to see someone I love go through this and it makes me holds me back a lot because I don't know how people around me will accept him...second chances should be given to those under the age of 21 at least so they can be given a chance to live a normal life as a productive member of society.

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