Feeds:
Posts
Comments

Posts Tagged ‘law school tuition debt’

Except for the part about giving a no-strings $1,000 per month to anyone amorphously defined “low-income” or “middle-income,” I mostly agreed with the sobering look at the Millenial Generation I read on Sunday. (Christmas Grinch or not, for a lot of reasons a $1,000 handout is a bad idea. For one, who’s going to pay for it? Don’t count on noblesse oblige.)

Just the same, I urge you to read the dire financial deconstruction in the cleverly conceptualized Highline story by Michael Hobbes, “Millenials Are Screwed,” subtitled, “Why millenials are facing the scariest financial future of any generation since the Great Depression.”

Their “touchstone experience” is “uncertainty” Hobbes explains. He runs through factors like salary stagnation, job and housing insecurity, and other cratered economic sectors to project that his will be “the first generation in modern history to be poorer than our parents.”

As it is, one in five currently live in poverty. And they have at least 300 percent more debt than their parents — more about that after. Plan for retirement? Buy a home? Not even.

And as for all that free money, here’s the other problem. The definition of “middle-income” or “middle class” is increasingly in the eye of the bean-holder. Uncle Joe Biden once ridiculously asserted, for example, that an annual salary of $379,000 was middle class.

Putting Biden’s neuron misfire into perspective, per the latest U.S. Census data, “In 2016, the median household income for all counties ranged between $22,045 and $134,609, with a median county-level value of $47,589.” A more learned economist than Uncle Joe says based on that data,“middle class ought to be defined as households making 50 percent higher and lower than the median.”

File:Soirée WikiCheese le 23 janvier 2015 - 57.jpgThat, of course, is not to dismiss with a straight face folks insisting through a mouthful of ripe ‘cru’ Beaujolais and Brie de Meaux that $300,000 to $400,000 annually is middle class.

Which brings me to something equally troubling, which is that millennials who are lawyers are smack in the throes of the same structural disadvantages Hobbes describes. Millenials earning a J.D. degree the past ten years have assured themselves of only one thing — astronomical student debt.

On average, borrowers in the law school class of 2014 took on $111,899 in debt according to US News & World Report. And the average indebtedness of 2016 law school graduates who incurred law school debt is worse still — in one word — appalling. Also see Stat Of The Week: Law School Graduate Debt Soars.”

https://upload.wikimedia.org/wikipedia/commons/thumb/3/37/Bury_your_head_in_the_sand.jpg/160px-Bury_your_head_in_the_sand.jpgMeantime, head-in-the-sand mandatory bar associations like the one in Nevada keep coming up with new ways to tighten the economic screws on their members, especially hard-pressed millenials. Last week the Nevada Bar sent a blast email survey asking members to weigh in on mandatory malpractice insurance. Also see “Join the Discussion: Whether Malpractice Insurance Should be Mandatory in Nevada.”

The survey was laughably replete with leading questions and agenda-driven outcome-bias. Knowing how these things work, the survey’s real purpose was to offer the tone-deaf governing board a fig leaf of cover for what they’re going to do anyway — no matter objections of the lawyer hoi polloi.

Happy then, the carriers with captive customers. Also for carriers — hallowed be the Nevada Bar since this insurance can easily run a few thousand dollars per year. But unhappy those who like Blanche Dubois will look to the kindness of carriers to resist the temptation to increase the cost of insurance across the board.

For Nevada’s millenial lawyers, it’s just one more structural disadvantage like all the ones faced by millenials generally. And as for the rest of us, time for a reassessment. Millenials aren’t entitled. And they aren’t slackers — they’re just screwed.

___________________________________________________________________

Photo Credit: Soiree Wikicheese, by Lionel Allorge at Wikimedia Commons under GNU Free Documentation License ;Bury your head in the sand, by Sander van der Wel at Wikimedia Commons Creative Commons Attribution-Share Alike 2.0 Generic license.

Advertisements

Read Full Post »

Recent news out of Ohio concerning debt-ridden new lawyers underscores the difference between a mandatory membership bar association and a voluntary one. Ohio is one of 18 states where lawyers can practice without being forced to join their trade association.

https://upload.wikimedia.org/wikipedia/commons/thumb/3/37/Bury_your_head_in_the_sand.jpg/160px-Bury_your_head_in_the_sand.jpg

In states where lawyers are forced to join a mandatory membership bar association as a precondition to practice, there are bar leaders with heads in the sand who act as though the crashing tides of debt drenching young lawyers were nonexistent.

But in voluntary states like Ohio, bar leaders have at last started examining the “unprecedented burdens faced by new lawyers.” Ten years past the “law school tuition bubble,” they may be a tad late — but in contrast to mandatory bars in Nevada and Arizona — at least they’re now considering potential solutions to the astronomical six-figure debt service new lawyers get along with their diplomas.

Futures Commission.

Tasked with researching and developing long-term solutions and “first action steps,” the Ohio State Bar Association established a 29-member Futures Commission more than one year ago to look at new lawyer burdens and “the need for acquisition of knowledge and the skills necessary to develop and carry on a successful practice; the lack of regulation for new legal service delivery options; and the widening access to justice gap.” In July, the Commission released its preliminary report.

Unlike mandatory bars that too often act below-the-radar through top-down mandates, the Ohio Bar sought input from members through town hall style meetings held in each of its 18 districts and supplemented these with input from its 2017 Leadership Academy class of new lawyers.

In Ohio, bar leaders believe “member satisfaction” is one of their association’s “core values” driving the stated goal of making “membership in the Ohio State Bar Association indispensable to Ohio lawyers.” 

It’s one thing to force lawyers to join an organization in order to earn a living in their chosen profession. But it’s another matter entirely when lawyers choose membership because the value proposition is so strong that membership is “indispensable.”

 

So much debt.

https://upload.wikimedia.org/wikipedia/commons/thumb/f/f9/Tin_Woodman.png/105px-Tin_Woodman.pngIt’s not like mandatory bars haven’t heard about the unprecedented tuition debt incurred by today’s young lawyers. More likely, they can’t relate to it. Many graduated from law school when women had big hair to the skies and fashion meant shoulder pads, parachute pants and Members Only jackets. Tuition then was a fraction of today’s troubles. Unsurprisingly, these bar leaders are tin-eared about the problem.

According to Law School Transparency (LST)  “legal education inflation far exceeds the inflation rate.

“In 1985, the average private school tuition was $7,526 (1985 dollars), which would now cost a student $16,294 (2013 dollars). Instead, the average tuition is $41,985 (2013 dollars). In other words, private law school is now 2.6 times as expensive as it was in 1985 after adjusting for inflation. Public school (for residents) is now about 5.5 times as expensive.”

As reported by the Cleveland Plain Dealer in July, “Ohio law school grads face debt of nearly $100,000 and few job prospects, report says,” the Commission’s report finds that the average 2015 Ohio law school graduate has approximately $98,475 in law school debt. Worse yet, “Only approximately 58 percent of 2015 Ohio law school graduates are employed in jobs requiring bar passage.”

And it’s only getting worse. For entering 2017 students, Ohio’s Law School Transparency (LST) numbers are even higher — well north of $150,000 on average.

In Arizona, LST projects even more sobering statistics for wanna-be lawyers starting law school in the Grand Canyon State this year. They should expect a “full price projected debt” for their J.D. degree of $175,084 if they are state residents graduating from Arizona State University. If they’re residents and start and finish at the University of Arizona, the number is $173,280.

At Arizona Summit Law School, one of the nation’s most expensive law schools, the “full price projected debt” is an astounding $252,571. This averages out to $200,978 among the three Arizona schools. It breaks out to an average debt service headache over 10 years of $2290 per month.

In Nevada, LST reports that students matriculating in 2017 at the University of Nevada, Las Vegas, the state’s only law school, can anticipate a “full price projected debt” of $175,310 and a $2000 per month nut over 10 years.

‘What me worry?’

https://upload.wikimedia.org/wikipedia/commons/thumb/3/36/Happiness.gif/209px-Happiness.gifThe root problem is that mandatory bars like those in Nevada and Arizona aspire to serve competing interests — those of the legal profession and those of the public. But it can’t be done because these interests often conflict.

Instead of alleviating practice burdens, for instance, mandatory bars constantly tinker with their bureaucratic spigots to open ever increasing cost, time and stress pressures on members. This is because they’re not necessarily looking out for the interests of lawyers.

In mandatory bar Nevada, for example, there’s a bar study group looking at the supposed merits of forcing all the state’s lawyers to buy professional liability insurance. If the model is mandatory bar Oregon, currently the only jurisdiction mandating professional liability insurance, expect only one blessed provider.

Moreover, the cost will be substantial. In 2017, Oregon lawyers ponied up a whopping $3,500 apiece for bare minimum coverage of $300,000 per incident and $300,000 aggregate. And Oregon has almost twice as many lawyers as Nevada.

Voluntary bars look out for the interests of members.

In closing, here’s what the Ohio Bar’s Futures Commission looked at:

•  How to ensure new lawyers enter the profession practice ready and without the crushing burden of student debt;
•  How busy lawyers at all stages of their careers can get the most out of their required continuing legal education credits;
•  The appropriate role of online legal service providers, limited multidisciplinary practice, fee-splitting and other emerging new business models in the delivery of legal services and if they can they help lawyers better serve clients and stay true to the values of the profession;
•  And with the real and perceived expense of legal services, how to ensure access to justice for all, regardless of income.

Besides supporting cost reducing law school initiatives, the Commission also took a departure from the latest gambit being promoted by mandatory bars: the licensing of non-lawyers to practice law. “Believing firmly that any provision of legal services should be done under the direction of a licensed attorney,” the Commission pronounced its opposition to “any effort to establish new categories of non-lawyer legal service providers (NLP) in Ohio and instead, support the development of programs or actions that would connect the unrepresented with available attorneys.”

So before state bars go all in and eliminate unauthorized practice of law rules to allow non-lawyers to directly compete with lawyers, something ought to be done to level the field. Stem the tide of unconscionable tuition debt from overpriced law schools.

But as they bang away on their Access to Justice drums, don’t expect a pronouncement like Ohio’s from mandatory bars in Washington, Utah and Arizona to name just three where non-lawyers already compete for business with lawyers.

Unfortunately, mandatory bar leaders aren’t listening. When they’re not holding expensive annual convention boondoggles like the Nevada Bar in Hawaii (2016), Texas (2017) and Illinois (2018), they’re busy finding new ways to make it harder for lawyers to earn a living. 

The Futures Commission Report is available here

_____________________________

Credits: Bury your head in the sand, by Sander van der Wel at Wikimedia Commons;Tin Woodman, by William Wallace Denslow at Wikimedia Commons, public domain; Life user Manual, by Unuplusunu at Wikimedia Commons, public domain; Smug by IburiedPaul at Flickr Creative Commons Attribution;3D Shackled Debt by Chris Potter  at Flickr Creative Commons Attribution; Second Band Drummer 5 Mono, by Dave Shaver, at Flickr Creative Commons Attribution.

Read Full Post »