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Is Law School a Good Investment? No, Law Prof Says, for Many 'Typical' Students

By Martha Neil

November 13, 2009, 9:58 pm CST

Does the cost of going to law school pay off for graduates? The answer to that question is no, for many “typical” students, according to a law professor at Vanderbilt University.

In a research paper recapped by the Tax Prof Blog, professor Herwig Schlunk calculates the cost of tuition versus the potential benefit of being paid more over a lengthy legal career.

Assuming that, even without a law degree, students could have been making $40,000 (“Also Ran”), $60,000 (“Solid Performer”) and $80,000 (“Hot Prospect”) annually, these same students—once tuition is added to the “opportunity cost” of what they could have earned during law school—graduate with a hefty hurdle that must be surmounted to turn a profit from their legal education, according to Schlunk’s abstract. The total ranges from not quite $200,000 for the Also Ran, to not quite $300,000 for the Hot Prospect.

Depending on the discount rate thought to be appropriate, that means law graduates must earn a starting salary of between $65,600 (for the Also Ran, at a 10 percent discount rate) and $198,179 (for the Hot Prospect, at a 26 percent discount rate) to get monetary value from their law degrees, according to the abstract.

As discussed in earlier ABAJournal.com posts, top BigLaw starting salaries paid to a small fraction of the nation’s graduating law students are now around $165,000. Even many major firms, however, are paying significantly less, and a number of law graduates are having difficulty finding legal work even at much lower salaries due to the economic downturn that hit the legal profession hard last year.

Hat tip: Economix (New York Times): “Law School as an Investment”

Related coverage:

ABAJournal.com: “Was It Worth It? With Debt of Up to $250K, Some Law Grads Are Dubious”

ABAJournal.com: “ABA Should Collect School Data on Law Grads’ Salaries and Debt, Prof Says”

ABAJournal.com: “ABA Lobbies for Student Loan Relief for Unemployed Attorneys”

Updated Nov. 16 to clarify headline and attributions.

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