Posted Apr 27, 2010 11:49 am CDT
A University of Illinois law professor sees parallels between the subprime mortgage crisis and the proliferation of law school debt.
Writing at the Conglomerate blog, Professor Christine Hurt makes her argument. “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,” she writes. “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.”
But then the economic crisis hit, “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.”
Hurt says this isn’t the first time that the legal job market has suffered, but the difference this time around is the debt that law graduates are carrying. “How can someone write off $100,000 or $200,000 in student loans as a bad call?” she asks. She wonders about the future of law school pricing, and whether someone will create an affordable model of legal education.
The Chicago Tribune noted Hurt’s blog post, but points out that law schools are seeing an increase in applicants despite the bleak job market and the high cost of a legal education. On the plus side for law students, some law schools that hiked tuition by the double digits during the past 25 years are now curbing the increases.
Northwestern University’s law school, for example, raised tuition by about 4 percent last fall, the smallest increase in 32 years, the Tribune story says. The school typically sends about 70 percent of its graduates to jobs at big law firms, but last year the number was about 56 percent. Yet the school was still ranked No. 1 by the National Law Journal for the number of its graduates going on to BigLaw.
Northwestern law school dean David Van Zandt told the Tribune he doesn’t think big law firms will ever hire the same numbers of graduates as they did in the past. “It doesn’t make a lot of sense to go to law school unless you go to a pretty good one,” he told the newspaper.