From Law Professor Christine Hurt (Illinois):
I have been thinking about this too. I doesn't seem like the system is sustainable when you juxtapose the massive expense (which as she points out cannot be discharged in bankruptcy) against the retrenching market for legal services. If anyone was thinking about law school and asked me at this point, I would say that unless you have the firepower to get into a good school and do well, I would look at doing something else as a career at the moment. Even in America there is not an unlimited demand for legal services.
For a couple of decades now (and until a few years ago), the conventional wisdom was that real estate would always rise in value and that the world would always need lawyers. Home ownership at whatever cost, particularly with tax-deductible interest rates, was better than alternatives such as renting; financing a law degree with student loans, some of which was low-interest and tax-deductible, was an equally good investment given the value of the law degree. Just as something about home ownership seemed intrinsically good, so did getting a law degree, from any law school. Strangely, most law school educations were priced similarly. Law schools with lower employment rates charged more money than some schools with higher employment rates. Price was not a clear signal of quality. Anyway, more and larger houses were built; more and larger law schools were built. Then, as if on a dime, the world changed and all of a sudden lots of people with law degrees were getting laid off, deferred, ignored. The legal market was shrinking or changing in a seemingly semi-permanent way. We found out from Bill Henderson that the market for graduates was not what the "mean" employment statistics seemed to be touting. But more students came, financing the journey with student loans premised on promised salaries that have de-materialized before our eyes. (See Forbes; see NYT.)
I have generally been sanguine about the disruption in the legal services market. After all, I went to law school from 1990-1993, which was a time of cancelled summer programs, fired associates and 50% offers to summer recruits. But I think the biggest difference is the debt burden. Law school tuition is much higher now, even at public schools where state money has all but disappeared. How can someone write off $100,000 or $200,000 in student loans as a bad call? Many of these loans aren't federal loans -- they are from private lenders at high rates. And, unlike homeowners, law students don't have a "put" option -- they can't tell lenders to take their law degrees and quit calling them.
I have generally been sanguine about the disruption in the legal services market. After all, I went to law school from 1990-1993, which was a time of cancelled summer programs, fired associates and 50% offers to summer recruits. But I think the biggest difference is the debt burden. Law school tuition is much higher now, even at public schools where state money has all but disappeared. How can someone write off $100,000 or $200,000 in student loans as a bad call? Many of these loans aren't federal loans -- they are from private lenders at high rates. And, unlike homeowners, law students don't have a "put" option -- they can't tell lenders to take their law degrees and quit calling them.
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