Becoming a Lawyer is No Longer a Guarantee of High Pay

When you were a kid, chances are pretty good that someone, somewhere, encouraged you to become either a lawyer or a doctor when you grew up. While both professions have been historically regarded as prestigious, it’s not so much the prestige that was on the mind of the person making the recommendation, but the fact that each has been known to serve as a source of substantial compensation – we all want the little ones around us to grow up thinking in terms of making a lot of money, so they will enjoy all of the best that life has to offer, including (especially?) financial security. However, the easy and widespread opportunities to earn a lot of money simply by being a lawyer have deteriorated significantly over the recent decades. While there are a few, key reasons for this, the overriding takeaway is that if you or someone you know is looking to a career in law in no small way because of its reputation as a well-paying gig, some re-thinking may be in order.

Lawyers are now, basically, everywhere. Presently, there is, roughly, one lawyer for every 246 people in the United States; yes, we are now a hyper-litigious society, to be sure…but that’s a lot of lawyers. With the number of lawyers sitting at a place well beyond what is honestly needed, the laws of economics work their immutable leverage and force salaries downward. The fact is that compensation for lawyers has been decreasing steadily for some time now, but it has made even bigger jumps backwards in recent years; according to the National Association for Law Placement, the median staring salary in 2008 was $72,000; at this time, it is $62,000. As a median figure, this means that fully half of all school graduates are making less than $62,000, and, in many cases, they’re earning a lot less. It is not at all uncommon for law school graduates today to be working in relatively low-level jobs that do not require a law degree, or even a college degree of any kind.

Exacerbating the problem of modest salaries is the amount of debt that new law school graduates take with them into the working world, a figure that has risen over 50% during the course of the last ten years, to a median number now at $141,000. Not only do the lower salaries, then, make it tougher to pay back that money, the combined effect of the smaller compensation and higher debt make for a less financially viable citizen, overall.  

One of the distinct problems contributing to this mess is something that has plagued the quality of higher education, more generally, for some time now: the number of schools. Higher education has become big business, and even the number of non-profit schools that offer law degrees has risen to a point where it’s simply not possible to graduate the number of lawyers we’re seeing now in the United States without essentially ensuring that the overall quality is diminished. This lower quality of law school graduate, in addition to representing a professional who is not capable of serving the consumer of legal services like he did decades ago, is being done a disservice by this proliferation of schools, because so many now will accept candidates who are not capable of getting jobs at quality firms.   

Is it still worthwhile to pursue a career in the law? The answer is, “maybe,” but it is not the definitive “yes” that it was decades ago. It is no longer enough to graduate with a law degree, because now there are too many schools of too mediocre a quality, and hiring firms and agencies know it. If you can gain acceptance to one of the truly top schools and do well, then, yes, you are likely to enjoy a highly-compensated career as a lawyer. However, if you or a loved one earns so-so grades at a so-so school, the fact that this so-so journey culminates in a law degree may likely prove to be of limited personal economic value.

The information contained here is for general information purposes only. The Financial Writer blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article, or any other article featured at this blog, should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

  

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