Is a Law Degree Still Worth It?
Law degree programs have taken a lot of heat in the media lately. It can cost upwards of $200,000 to earn a law degree, and lucrative legal positions at top firms have dried up in the post-crash economy. It’s not uncommon to find stories highlighting the plight of underemployed law school graduates working at coffee shops and restaurants, wrestling with hundreds of thousands in student debt.
But according to the recently-released paper The Economic Value of a Law Degree, by Michael Simkovic and Frank McIntyre, published on the Social Science Research Network, there is still value in a law degree—even if it’s not the automatic ticket to a lucrative career that it used to be. Here are a few key findings from the study.
Statistically, you’ll still earn more with a law degree than without one
Generally, the media message around law degrees is a grim one: huge tuition and debt burdens, and a low likelihood of getting a well-paying job. But according to this study, law school grads are likely to earn an average of $1 million more in their lifetime than those with a Bachelor’s degree in a similar field.
The study took a look at the earnings of a diverse sample of law school graduates over their lifetime, regardless of the career they settled on—as opposed to many previous studies, which looked at starting salaries only and more generic career sets. According to their findings, the average value of the degree did exceed the tuition cost by a significant amount. Those who held a law degree were found to have 60% higher monthly wages and 50% higher hourly wages than those with a Bachelor’s degree.
Law school grads earn a lot, but it may not be by working as a lawyer
One of the things to note about this study was that it tracked the salaries of law school graduates no matter what careers they landed in—including a significant number of people who did not wind up practicing as lawyers. According to the study, approximately a third to a half of US law graduates don’t work in the field of law. 46% of pre-law students, according to a study done in 2012, plan to use their law degree to get into politics or business.
Law school grads are more likely to be employed
There’s been plenty of data about law school graduates having trouble finding jobs. But compared with those who hold just a Bachelor’s degree, the study shows that law school grads are actually more likely to be employed, either full-time or part-time—at a rate of 90%, vs. 86% of Bachelor’s degree grads.
The value of a law degree is cyclical, and today’s value is within historical norms. It might seem like the value of a degree in law is sinking fast—but according to this study, it’s not currently outside the normal range, which changes from decade to decade. Earnings for law school grads were up in 2001 and 2007, and down in 1999 and 2002. Right now, earnings are in decline—but they are not below the lowest point in the cycle measured between 1996 and 2011.
The data doesn’t suggest a permanent and dramatic change in the legal industry
The possibility has been raised that globalization, the proliferation of websites like LegalZoom that make it cheap and easy for people to perform basic legal tasks like making out a will or corporatizing a small business without a lawyer, and the recession in general have had an irrevocable negative effect on the legal industry.
According to this study, there is little evidence in the data to support this. While earnings for law school graduates are down, they are also down for Bachelor’s degree holders in similar fields and in general—suggesting that while the economic downturn has had a negative effect on wages across the board, law school grads are probably not facing unusual additional challenges in these areas.
Law degrees are worth more for men
Another thing to take note of is that the study found men with law degrees earned considerably more than women with law degrees. The average wage for men was found to be around $1,030,000 for men, and $820,000 for women. Even so, the average value of a law degree was found to be much lower than the lifetime earnings potential for both men and women.
Younger law school grads are indeed suffering
That said, it’s undeniable that those just starting out in legal careers have seen major decreases in starting salaries—and more instability in the job market. Still, the study suggests that despite these challenges, recent law school grads are in fact doing better economically as a whole than those who hold only a Bachelor’s degree.
Despite the anecdotal evidence and first-person accounts of law school graduates stuck in low-paying jobs with large amounts of student debt, it does seem that law degrees are financially worth it for most graduates. Even with all this data, however, it is difficult to say whether a law degree will be valuable to any individual over the course of their lifetime. It’s still best to get into law because you have a passion for it—and talk to graduates of the law school you’re considering to get a real view of how their degrees have performed for them in the real world. If a law school degree isn’t right for you, there are still other options; consider a political science or other related degree from a traditional or accredited online school.
Social Science Research Network: The Economic Value of a Law Degree
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