I was surfing the web when I ran into this article about MBAs (and lawyers) and their difficulties finding jobs. I had to eat crow because my motto after law school was "I wish I got my MBA instead." So, apparently, they are feeling the effects of the recession and squirming under the pressure as well. So, MBAs, lawyers, doctors... anybody else want to join our pity party? Why anyone goes to professional school anymore, I have no idea. Read on:
Nelson Chiu shook hands with the PepsiCo representative, exchanged a few brief words and received a parting "good luck."
He was dressed in a crisp, dark blue pinstripe suit on a recent Wednesday, and his voice was starting to fade; he'd been at a career fair inside the University of California, Davis, field house since 11 a.m., talked to more than a dozen companies, and it was closing in on 2 p.m. on the afternoon of his daughter's first birthday.
For Chiu, who earned his MBA in 2009 from UC Davis' highly regarded Graduate School of Management, a solid lead would have been a great gift.
For years, someone like Chiu with a newly minted degree from a top-flight business or law school had the closest thing to a golden ticket for a high-paying job. But the ongoing recession has brought graduates – many staggering under mountains of student loan debt – face to face with a new economic reality.
For most of the past decade, markets for both groups of grads were humming: 10 percent to 20 percent growth per year for MBA graduates, according to the nonprofit Graduate Management Admission Council; a 10-year stretch of near-90 percent job placement for law grads, the National Association for Law Placement reported.
But those days seem like ancient history now.
"The biggest challenge is the people who've been laid off with the same degree and with a lot more experience," the 31-year-old Chiu said. "There are too many applicants and not enough career opportunities right now."
Companies that hired 12 MBAs on average in 2008 hired fewer than six in 2009, the GMAC reported.
Nearly 80 percent of employers scaled back on-campus recruiting of MBAs in fall 2009, while nearly half reported a decline in full-time MBA job postings, according to the MBA Career Services Council, which tracks MBA hiring.
James Leipold, executive director of the National Association for Law Placement, had two words to describe the market for law school grads:
"It tanked," he said. "The pipeline is clogged up."
A student-recruiting survey released Tuesday by the association was not encouraging.
Second-year law students received far fewer offers of summer internships – the traditional gateway to a firm – in 2009 than in 2008. Law firms cut back sharply on recruiting. Grads who received offers were often told the job wouldn't start for months.
"For the class of 2009, the largest impact was the deferral phenomenon," Leipold said. Some grads still await their start dates.
Much like their business clients, law firms are fretting about their overhead as they try to mind the bottom line.
"There's a fear of overhiring and, with the downturn, law firms aren't investing until they need people," said Jeff Koewler, managing partner at Downey Brand, Sacramento's largest law firm.
Downey Brand continues to extend job offers to its summer associates – second-year students accepted into the firm's internship program – including all 11 from 2008, who started in fall 2009.
But in 2009, just eight were offered positions to start in fall 2010. This year, seven or eight will enter the summer program with a chance to latch onto the firm in fall 2011.
For anxious and jobless graduates saddled with debt, the timing couldn't be worse.
Law schools try to help
Law school students borrow an average of more than $80,000 for a private school, more than $54,000 for a public school, according to the NALP, though executive director Leipold said "the averages mask the highs."
At the most expensive schools, the average borrowed "is well over $100,000. Some owe $200,000," he said.
At UC Davis, a 2009 law grad's average debt load was about $73,000, officials said; an average Davis MBA graduate owed $41,000.
Recent grad Chiu said he owes around $72,000 – about half of it to an uncle and aunt.
Natalie Cordellos of Sacramento graduated last May from the University of the Pacific's McGeorge School of Law, but nervous months passed before she started work at a Sacramento workers' compensation defense firm in January.
"Student loans were coming due," she said. "We (students) were all going through that."
Cordellos wouldn't say how much she owes. But McGeorge officials said the average 2009 graduate owed about $120,000.
NALP's Leipold said law schools are aware of the pressure on grads, so much so that 42 percent of surveyed schools had created jobs for them.
"That's huge," Leipold said, his voice rising for emphasis. "They're trying to create their own relief packages."
Schools are also taking other steps to help students.
Boalt Hall, UC Berkeley's law school, has launched career development and financial planning programs for third-year law students; doubled the number of "Bridge Fellowships" available to third-year students who haven't found jobs; and is taking applications for short-term loans from financially challenged graduates.
At Davis' Graduate School of Management, associate director of admissions Holly Bishop-Green has seen a dramatic increase in the loan repayment assistance program, from 16 students in January 2009 to 28 in January 2010 – about 15 percent of the graduating class. Her office will issue more than $200,000 in aid this year.
And law schools' placement staffs are "redoubling their efforts," said Dave James, assistant dean for career development at McGeorge. "We're going out into the community and to employers and saying, 'Will you take our folks?' "
Despite the tough market, law and business schools are seeing more, not less, interest.
Admission applications rise
Two-thirds of MBA programs surveyed said they received more admission applications in 2009 than in the previous year, according to the GMAC, which administers the standardized GMAT, or Graduate Management Admission Test.
The council also posted the most examinations taken since it began keeping records in 1954, with nearly 270,000 worldwide in 2009, up from 265,000 in 2008.
Council spokesman Sam Silverstein said interest in business schools almost always peaks during a recession.
At law schools, admissions nationally for fall 2010 increased about 3 percent – 4 percent in the West – as of February, according to the Law School Admission Council. UC Davis School of Law collected more than 4,000 applications for fall 2010, up 22 percent from 2009.
Students are attracted to both fields because they offer a lifestyle "where they can have the American dream of owning a home and supporting a family," said Sharon Pinkney, an assistant dean of admissions at UC Davis.