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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