Saturday, January 8, 2011

The NYTimes Epic Article on the Law School Scam


We've made it to the big leagues! This article is probably the most comprehensive piece on the law scam movement that I've seen since I started blogging a year ago. It's seven pages long so you just have to click over to the New York Times and read all of it.

The only issue I have with the article is that BIDER and The Jobless Juris Doctor aren't listed and we've been a part of the scam movement from the start. Well, I'll forgive the author this time since the piece was so well-written. I hope these articles in the mainstream media forces the archaic law school system to change for the better, but I'm not holding my breath. At the very least these articles are helping us spread our warning to prospective law students.

On an added note, BIDER reader Jess sent me a link to Bloomberg's list of 20 colleges with high tuition and low return on investment (ROI). It would be interesting to see a list of the top 20 law schools with high tuition and low ROI. However, I've always wanted this blog to be more than just a warning about law school. The majority of colleges and graduate schools in the United States are overpriced bad investments. Paying over $100k for a college degree is a travesty. Parents and students should take note of the scam at all levels to save themselves from our fate since the scam blogs and mainstream media articles weren't around when Angel and I were applying to college and law school.

Apologies for not blogging recently. I've been busy, so personally it's not exactly a bad thing that I'm not sitting on my ass venting and reading blogs all day like I was earlier last year. I wish everyone a busy and successful new year. I love our readers but my greatest wish would be for each of our readers to be busy working, traveling, or dating. Hope your new year is off to a good start.

27 comments:

  1. Thanks for the mention, HardKnocks. This is a great article and I was thrilled that they got it right (except for leaving us out).

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  2. I sent David Segal a list of all the blogs...sigh. This happens every time! I think it comes down to whichever title the writer thinks is catchiest regardless of which ones are most visited. This will still drive a lot of traffic our way! Good job guys!

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  3. Kimber, you rock! You've done a great job as the face of this movement and starting the Down By Lawcast. This is a great start to the new year for all of the law scam bloggers.

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  4. You think this is a great article? There's a lot that's good in it, but what do you think the average reader is going to make of this idiot:

    "Mr. Wallerstein rented a spacious apartment. He also spent a month studying in the South of France and a month in Prague — all on borrowed money. There were cost-of-living loans, and tuition of about $33,000 a year. Later came a $15,000 loan to cover months of studying for the bar.

    "Today, his best guess is that he should be sending $2,000 to $3,000 a month in total, to lenders that include Wells Fargo, Citibank and Sallie Mae.

    “'There are a bunch of others,' he says. 'I’m not really good at keeping records.'”

    He is completely irresponsible and not representative of most recent law grads who may be carrying six-figure debt - but not a quarter of a million dollars' worth! Using him as an example shifts the focus from the law schools - which should know better - and puts it on the moronic minority of students who did absolutely no research about the profession or the schools and took out every loan that was available to them.

    You can be concerned about the law school scam without having an ounce of sympathy for fools like Wallerstein.

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  5. I wish the bar would protect the bar like the AMA protects doctors. With 40,000+ JDs graduating annually you'd think they would at least raise the bar on foreign law school grads sitting for the exam.

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  6. That article is great.

    I do have a problem with some minor details (TTR is not anonymous, for one), but I'm not complaining about the exposure to the problem.

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  7. And to have in the paper of record write such a lengthy piece about says it all....you guys held it down even when so many many people (law school administrators, prospective law applicants, temp agency hawks and so many others) advised you that nothing would come of your actions with these blogs.....you are the ones to be thanked for this article.....there is no way, at all, now that any law applicant to any law school in these here United States will get any sympathy (or empathy) from me now for going to law school....no way....if they don't read the Gray Lady, they shouldn't be in law school any damn ways....

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  8. Yes just read the article myself. Well written and Bravo to the law school scam bloggers to get their message across in such a big public forum!

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  9. That pic of the Roulette Wheel is brilliant!

    It reminds me of a similar cartoon I saw some years ago where the roulettte wheel was similarly divided up like a pie chart,and a couple of very small slivers said "professional athlete" or "movie star" and there were some other slices, with the biggest slice (about half the chart) that said "Sales"

    The caption read: "Career Wheel of Fortune"

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  10. I remember a microeconomics textbook that discussed professions and how they tend to limit the supply of new members.

    This was more than 30 years ago and I can't remember the author or title.

    The textbook author suggested the law profession is one of the few professions that does little to limit new members.

    The author hypothesized that currently employed attorneys would see additional work resulting from the new entrants filing new litigation.

    So the currently employed senior attorneys would see the overall litigation business expand.

    And one might suggest clients tend to value experience in law much more than they do for other professions such as medicine or engineering, so well-heeled clients gravitate toward expensive senior attorneys when they need litigation defense.

    So expecting the legal profession to police itself as far as limiting the supply of new attorneys may be a legal "pipe-dream" when viewed from the economic perspective of the experienced attorneys.

    BTW, I'm an engineer, not an attorney, so my view is from outside the profession.

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  11. Your view may be from outside the profession, but it matches perfectly with views I've seen from legal professionals in published law review articles. The profession cannot be trusted to self-regulate because the senior members do not share a common interest with the new entrants. I don't think it's as much about who's more experienced but about who has ownership. People who currently have the largest clients (not technically a property interest, but an indisputable source of power) and people who own the firms have markedly different interest than the laborers who work for the firms, even though both groups have J.D.s.

    Not surprisingly, the system has been skewed towards the owner/partner group and against the non-empowered group.

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  12. Thanks for providing that info, Kimber. I was surprised that this blog and JJD were not mentioned. The fact is "Jobless Juris Doctor" is short and catchy. It also sums up the situation for many JDs.

    In the end, the piece nailed most of the key points. This will be picked up by other news sources. And if meaningful change occurs, it can be cited as an example that spurred reform.

    Unfortunately, too much of the article was centered in Idiot Michael Wallerstein.

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  13. It is a great article. 9:25 AM, I am an experienced attorney (20 years) in a 2 person law firm representing businesses. That textbook is just nuts. It does not even remotely work out that way.

    There are only 2 ways to stop this madness. Easiest way is to allow law school debt to be dischargeable in bankruptcy. That would cut the number of loans by one-third by next year, and cut the number of law schools/grads, etc. by about one-third in a few years. It doesn't fix the problem, but it helps quite a bit. The second way (the right way) is to take away any guarantee of law school loans by government. That would cut the number of loans by about two-thirds overnight, followed by a massive reduction in law school tuition - probably down to about $5,000 to $10,000 per year, which is really still a very, very profitable number for any reasonably managed school.

    If both measures were taken, then on a going forward basis, the right number of new lawyers would come out of the system every year in about 3 to 5 years, and all these unemployed lawyers would be soaked up by the system in about 10 to 20 years.

    The canard that the loan guarantees help poor law students is total Bullshit. Right now, that's who is getting screwed by the current system.

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  14. J-Dog.

    It sucks for everyone, including experienced attorneys. I'm an owner/partner. It's bad all around. The big law firms are kind of like the Wizard of Oz - behind the curtain they are scared.

    Book I recommend is "The End of Lawyers" by Richard Susskind. That is closer to the truth than whatever you are reading in these law review articles - probably written by law professors.

    Just saying.

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  15. "It sucks" is relative. I don't know your situation, but the partners at a firm I used to work at all took home massive profit shares in 2006 (like over a mill each), but by 2009 their profits were being slashed. They all said "this sucks," but they're still making money out of the system, it's just not as much. That generation is mostly over 50 and many can retire on what they have. Compare to a recent JD with 200k in debt. See the difference?

    The entrenched may be scared, but their fears come from an entirely different source than the fears of young attorneys just coming out of law school. It may "suck" for everyone, but that doesn't change the fact that differing motivations among subgroups prevent meaningful change to the system.

    Although Susskind misses the mark on a few things (as we've seen in the mortgage debacle, highly automated processes have severe drawbacks hat I'm not sure can be resolved by future technologies), even if his book were entirely true, it doesn't change the point. What lawyers there are in the future cannot be trusted to self-regulate the profession.

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  16. Assuming Mr. Wallerstein is being quoted correctly, I'd say he has pretty good chances of making in Wall Street or DC politics. After all, he sees is self-created debt as "illusory" and feels like he can beat the dealer, not have to worry about paying back the money he with full knowledge borrowed. As for law schools as ripoffs, well, that's hardly news.

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  17. Going to law school was the single worst decision of my life. I graduated from Thomas Jefferson with $199,274 in debt. I moved back in with my parents so I wouldn't have to take out a bar loan, unfortunately I have yet to pass and am living off an allowance. I've had one interview in the last seven months. I'm making it my mission in life to inform people about the dangers of law school, like I wish someone would have done for me.

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  18. The scale of the problem may be new, but the concept that law school is not worth the tuition, or that there are too many lawyers for the relative handful of highly remunerative positions, is hardly novel. In 1992, during a severe recession, my brother decided not to go to a third-tier law school because it did not make financial sense given his interest in helping people. He became a social worker and is happy and, after 20 years, debt-free. In the early 00s - during a mild recession - I went to a top tier school on a full scholarship, rejecting higher-ranked schools such as Harvard because of the cost involved. Over time the higher ranking schools may have afforded greater earnings opportunities, but I wasn't willing to take that chance. Between law school and undergrad at a private college, I still ended up with enough debt for living expenses that I only paid it off this year - 10 years after law school and almost 20 after undergrad. Before making the life-altering momentous decision to get a law degree - before taking the LSAT or enrolling - I did enough research to know that the USNews and NALP figures on employment rates and salaries were complete BS. It apparently will surprise many readers (and writers) of the "law school is a scam" blogs to learn that for decades the high level of risk associated with obtaining a JD has been common knowledge, even among first generation college grads like my sibling and me. As for the Times article, I find it hard to imagine that it will generate much sympathy. The main protagonist, Mr Wallerstein, made a series of poor life decisions and horrific financial decision (Prague? France? seriously?) and he more or less acknowledges that he did not do any due diligence before taking on debt that cannot be discharged. It is deeply ironic that lawyers - people who are supposed to read carefully and are paid to pay careful attention to detail - are now complaining that law school is a scam.

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  19. The article states: "But student loans have always been the financial equivalent of chronic illnesses because there is no legal way to shake them." This suggests that student loans have always been non-dischargeable in bankruptcy. Prior to 1998, they could be discharged after 7 years, and prior to 1991, after 5 years of from first payment due date (forbearance periods, etc. excluded). This seems like an important point - the law could be changed again.

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  20. The benefit of the degree(s) would have to be permanently surrendered, if the loan amount owed were to ever to be considered dischargable/forgiven.

    With a non-tech/science field accreditation, like a JD, it would be a simple matter to sign a lifetime JD disqualification/BAR De-accrediting agreement, and allow the person to then dump the debt in bankruptcy, and move on.

    There is simply a ceiling on how many lawyers are either needed or desireable, these JD recpients simply do not produce anything at all in most cases, and someone trying to do useful public aid, or consumer affairs non-profit work, of benefit, cant afford to do anything useful with the amount of money they owe.

    Part of this was also honestly GREED of people wanting the status, trendy, urban upscale lifestyle, and perceived income of a attorney, who dresses up, does no labor,
    is showered in money and perks..etc.. when that simply was never a practical or earned outcome from a 'value' reality of what the mean avg JD candidate truly brings to the table.

    The glut of candidates in any field means the mean avg is going to go wanting. Doesn't matter if you are a longshoreman being outbid by illegal immigrants or a JD who followed hundreds of thousands of others each year into a labor glut, the impact is the same on your prospects.
    The school system is designed to crank out the degrees, and is able to vastly outstrip the possible need.
    The same thing happens with every pvt. scam ''school'' targeting daytime TV watchers, that should be obvious to anyone from their ridiculous 'majors' and claims,
    to be full on scams to hook dreamers into non-dischargable debt.

    Its fair that if you signed on for non-dschargeable debt that you are stuck with it, as agreed,
    but turning in any degree,
    or potential for ever being BAR accredited,
    as well as right to ever apply for a student loan in the future,
    in exchange for a bankruptcy, is a fair way for people who made a bad decision can move on, as best they can.

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  21. I would concur with all the bloggers who noted that Mr. Wallerstein is beneath contempt. He strikes me as someone so far detached from reality that he would not be able to find gainful employment if the unemployment rate for lawyers was -15%. In fact, it seems unlikely that with his attitude he would be able to find work anywhere doing anything.

    The article could have been stronger if they focused on someone who went to a good school, got good grades was moderate in the debt load (which would still be eye-popping for most readers) and still can't find work.

    One thing left out was that the 2011 crop of grads will be hitting the pavement in four months at which point the 2010 grads will be in even more dire straits.

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  22. oh, and the Gihan Fernando in that article did a quick sojurn to Cornell Law School when I was there. He was as slippery then . . . .

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  23. @ 9:48

    Not in law by any means, but the man's post is a bit exaggerated. I would not have taken on debt for a third-tier law school, but to criticize his attitude is ridiculous. A trip to Europe is no big deal and Prague is cheap. He will be talking about it for the rest of his life, while all the nasty posters here will have gone to Europe 10 times by the time the poor man dies. Give him a break. Work gives money but no time. The kid has time though no money. I do not blame him for traveling.

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  24. P.S. Post is actually for 3:27.

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  25. No, 9:48 is right.

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  26. What's going to be genuinely "nasty" for Wallerstein is when he discovers that the credit lines have (justifiably) dried up, the girlfriend's ardor also dries up with the end of the good times, and his loser "friends", who "look up to him", aren't exactly interested in helping him much either.

    I hope the NYT follows this clown's subsequent adventures. I look forward to the installment a year or two or five from now, when the walls have really closed in and he sobs and wails about how damn unfair it all is.....

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  27. I always say that the biggest beneficiaries of law schools are NEVER the law graduates, but the law firms and other employers of law graduates.

    Another beneficiary of law schools is the faculty and the administration running the law schools.

    In this capitalistic society, why would the law school industry in general make the law graduates the biggest beneficiaries, when the people running the law industry are law firms, employers of law graduates, and the faculty??

    As a corollary, college education in the US mainly benefits corporate America, who are the employers of college graduates. Education in America produces workers for corporate America, not citizens for the society.

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