“Buy when everyone else is selling.”
From Warren Buffett on down, it’s a time tested approach to investing. It doesn’t mean purchase anything that comes along, or overpay, but it’s a contrarian approach to the madness of markets which tend to drive valuations to extremes for relatively short periods of time.
The law school and legal markets have seen those swings, and now they are in a serious downswing, as documented by Prof. Glenn Reynolds, by a Coalition of 67 Law Profs and Deans, and increasingly by the media.
We even have the absurdity that To Place Graduates, Law Schools Are Opening Firms:
The plan is one of a dozen efforts across the country to address two acute — and seemingly contradictory — problems: heavily indebted law graduates with no clients and a vast number of Americans unable to afford a lawyer.
This paradox, fed by the growth of Internet-based legal research and services, is at the heart of a crisis looming over the legal profession after decades of relentless growth and accumulated wealth. It is evident in the sharp drop in law school applications and the increasing numbers of Americans showing up in court without a lawyer.
Take these warnings seriously. The problems are real.
But if you really want to be a lawyer, I don’t think all this doom and gloom should scare you away. This market will, and should, weed out the people who go to law school as a default or based on some unrealistic presumption of a lucrative career. This weeding out is a good thing for those who persevere.
Buy law school in this downturn with all the caveats applied to investing. Understanding what you are purchasing from a school in terms of job prospects. Do not overpay by going heavily into debt at a school from which you have little realistic prospect of obtaining the employment necessary to handle that debt. Do not buy law schools that others are shunning for good reason.
For the people who should be going to law school and who choose wisely without rose-colored glasses, this may be a buying opportunity
[Note — this is a restored post due to a data loss. Any original comments have been lost.]
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Comments
I’m gonna pass. In my lifetime, I’ve sold cars, mobile homes and insurance. I don’t want to sully my reputation! 🙂
In all seriousness, unless one has about $100k sitting in a drawer to pay for a big chunk of law school, I would rather call one and save the cash.
Applications to law schools dropped by a huge percentage over the last decade, but the numbers accepted stayed the same, or even rose in some instances.
What that tells you is many students who would not have been accepted years ago were taken in by law schools to keep up the schools’ cash flow. They knew there would be few jobs for such students and their debt load would never work.
Shame on many law schools.
The problem, as illustrated by Jack Balkin in this post at his blog, is that a significant proportion of law school grads, particularly at lower tier law schools, either do not end up employed as lawyers or end up in law positions at salaries that won’t cover the money required to pay back the loans.
This is a serious problem: unless you are confident enough that you will end up at a top-10 or top-20 law school AND you either have independent means or are confident enough that you’ll end up with a high paying position, you’ll be in a situation in which you’ll be a lawyer — and broke.
That’s not sustainable, either for an individual or for society. At a societal level it’s a waste of resources — people going into law, unprofitably, when they could have done other useful things. At an individual law it’s a tragedy.
Law schools are noticing but as usual they’re cynical. Northwestern will cut enrollment this year — not because there is a glut of lawyers but to protect their precious US News ranking. Expect more law schools to do the same. They’ll also increase tuition to make up the loss of income.
If a person has a burning desire to be a lawyer, all well and good — read the law. But don’t borrow enormous sums of money to be a lawyer, because the odds are that debt will become a millstone around one’s neck.
[…] although he never made the wise decision to pick up a law degree (just think, he'd be even RICHER). As Jacobson explains: “Buy when everyone else is selling.” From Warren Buffett on down, it’s a time tested […]