Law School Discussion

LOWEST LSAT SCORE ACCEPTED

Re: LOWEST LSAT SCORE ACCEPTED
« Reply #20 on: January 30, 2009, 10:34:54 AM »
I think people react offended to the presumption that anything below Tier 1 isn't worth the price of admissions because they find themselves in a precarious situation if said presumtion holds water. If you can't evaluate yourself and others objectively, this is not the right field for you or Al Sharpton.

This is how you evaluate things objectively. I look in the mirror and think "Damn, what a baller." Obviously I'm a master of objectivity, b/c objectivly speaking- I'm a f###in baller.  ;D

Re: LOWEST LSAT SCORE ACCEPTED
« Reply #21 on: January 30, 2009, 12:29:43 PM »
If you score at or below the 30th percentile on the LSAT (146 and below), then I think you should seriously consider another career path while you are studying to retake the exam. There is a statistically significant positive correlation between success on the LSAT and success in law school. The exam is designed to test certain basic skills that are critical to this success: reading and verbal reasoning, critical and analytical thinking, time management, etc. If your LSAT score is in the bottom third, then you either lack these skills or you weren't adequately prepared. Either way, law school may not be for you. You'd be well advised to carefully consider your options.

Law school is an expensive prospect... even Cooley will run you $35,000 a year after tuition, fees, room & board. Factor in the opportunity cost of the salary that you could earn by getting a job today, the time value of money, interest on any loans you will have to take out, and it may not be a good financial decision in real terms.

I ran a quick, rudimentary NPV calculation on attending Cooley:

Assuming Cooley costs $35,000 per year, tuition does not increase during the 3 years you are there, and you pay cash.
Assuming you could get a job now earning $30,000 per year, with a 5% annual raise.
Assuming you get hired immediately after law school at $47,750 (the average in 2007 for Cooley grads), with a 5% annual raise.
&
Assuming a 7% discount rate

In this case, your investment in law school does not have a positive net present value until year 25, after working for 22 years. If you work for 30 years, then the net present value of investing in law school is $51,788.91.

YEAR   1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16   17   18   19   20   21   22   23   24   25   26   27   28   29   30   31   32   33
Career year            1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16   17   18   19   20   21   22   23   24   25   26   27   28   29   30
COOLEY                                                                                                   
School Cost   -$35,000.00   -$35,000.00   -$35,000.00                                                                                          
Salary sacrificed g=5%   -$30,000.00   -$31,500.00   -$33,075.00   -$34,728.75   -$36,465.19   -$38,288.45   -$40,202.87   -$42,213.01   -$44,323.66   -$46,539.85   -$48,866.84   -$51,310.18   -$53,875.69   -$56,569.47   -$59,397.95   -$62,367.85   -$65,486.24   -$68,760.55   -$72,198.58   -$75,808.51   -$79,598.93   -$83,578.88   -$87,757.82   -$92,145.71   -$96,753.00   -$101,590.65   -$106,670.18   -$112,003.69   -$117,603.87   -$123,484.07   -$129,658.27   -$136,141.18   -$142,948.24
Lawyer Salary g=5%            $47,550.00   $49,927.50   $52,423.88   $55,045.07   $57,797.32   $60,687.19   $63,721.55   $66,907.63   $70,253.01   $73,765.66   $77,453.94   $81,326.64   $85,392.97   $89,662.62   $94,145.75   $98,853.03   $103,795.69   $108,985.47   $114,434.74   $120,156.48   $126,164.31   $132,472.52   $139,096.15   $146,050.95   $153,353.50   $161,021.18   $169,072.24   $177,525.85   $186,402.14   $195,722.25
Net gain/loss   -$65,000.00   -$66,500.00   -$68,075.00   $12,821.25   $13,462.31   $14,135.43   $14,842.20   $15,584.31   $16,363.52   $17,181.70   $18,040.79   $18,942.83   $19,889.97   $20,884.47   $21,928.69   $23,025.12   $24,176.38   $25,385.20   $26,654.46   $27,987.18   $29,386.54   $30,855.87   $32,398.66   $34,018.59   $35,719.52   $37,505.50   $39,380.77   $41,349.81   $43,417.30   $45,588.17   $47,867.58   $50,260.96   $52,774.00
                                                                                                   
NPV T0   -$60,747.66   -$118,831.34   -$174,400.82   -$164,619.55   -$155,021.10   -$145,602.07   -$136,359.10   -$127,288.89   -$118,388.21   -$109,653.91   -$101,082.86   -$92,672.02   -$84,418.39   -$76,319.03   -$68,371.07   -$60,571.66   -$52,918.04   -$45,407.47   -$38,037.29   -$30,804.88   -$23,707.64   -$16,743.07   -$9,908.67   -$3,202.02   $3,379.27   $9,837.55   $16,175.11   $22,394.22   $28,497.08   $34,485.86   $40,362.71   $46,129.71   $51,788.91


Then, I ran the same calculation using University of Chicago's numbers:

Assuming UChicago costs $50,000 per year, tuition does not increase during the 3 years you are there, and you pay cash.
Assuming you could get a job now earning $50,000 per year, with a 5% annual raise.
Assuming you get hired immediately after law school at $145,000 , with a 5% annual raise.
&
Assuming a 7% discount rate

In this case, your investment in law school does not have a positive net present value until year 8, after working for 5 years. If you work for 30 years, then the net present value of investing in law school is $1,268,131.48

 
YEAR   1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16   17   18   19   20   21   22   23   24   25   26   27   28   29   30   31   32   33
Career year            1   2   3   4   5   6   7   8   9   10   11   12   13   14   15   16   17   18   19   20   21   22   23   24   25   26   27   28   29   30
UChicago                                                                                                   
School Cost   -$50,000.00   -$50,000.00   -$50,000.00                                                                                          
Salary sacrificed g=5%   -$50,000.00   -$52,500.00   -$55,125.00   -$57,881.25   -$60,775.31   -$63,814.08   -$67,004.78   -$70,355.02   -$73,872.77   -$77,566.41   -$81,444.73   -$85,516.97   -$89,792.82   -$94,282.46   -$98,996.58   -$103,946.41   -$109,143.73   -$114,600.92   -$120,330.96   -$126,347.51   -$132,664.89   -$139,298.13   -$146,263.04   -$153,576.19   -$161,255.00   -$169,317.75   -$177,783.63   -$186,672.82   -$196,006.46   -$205,806.78   -$216,097.12   -$226,901.97   -$238,247.07
Lawyer Salary g=5%            $145,000.00   $152,250.00   $159,862.50   $167,855.63   $176,248.41   $185,060.83   $194,313.87   $204,029.56   $214,231.04   $224,942.59   $236,189.72   $247,999.21   $260,399.17   $273,419.13   $287,090.08   $301,444.59   $316,516.82   $332,342.66   $348,959.79   $366,407.78   $384,728.17   $403,964.58   $424,162.80   $445,370.94   $467,639.49   $491,021.47   $515,572.54   $541,351.17   $568,418.73   $596,839.66
Net gain/loss   -$100,000.00   -$102,500.00   -$105,125.00   $87,118.75   $91,474.69   $96,048.42   $100,850.84   $105,893.39   $111,188.05   $116,747.46   $122,584.83   $128,714.07   $135,149.78   $141,907.26   $149,002.63   $156,452.76   $164,275.40   $172,489.17   $181,113.62   $190,169.31   $199,677.77   $209,661.66   $220,144.74   $231,151.98   $242,709.58   $254,845.06   $267,587.31   $280,966.68   $295,015.01   $309,765.76   $325,254.05   $341,516.75   $358,592.59
                                                                                                   
NPV T0   -$93,457.94   -$182,985.41   -$268,798.73   -$202,336.25   -$137,116.06   -$73,114.94   -$10,310.11   $51,320.81   $111,799.74   $171,148.23   $229,387.40   $286,537.99   $342,620.34   $397,654.42   $451,659.83   $504,655.79   $556,661.18   $607,694.50   $657,773.92   $706,917.28   $755,142.08   $802,465.48   $848,904.32   $894,475.15   $939,194.19   $983,077.36   $1,026,140.29   $1,068,398.30   $1,109,866.44   $1,150,559.47   $1,190,491.89   $1,229,677.91   $1,268,131.48


Obviously this data isn't even close to perfect, but I think it does give some idea of the disparity:

T4 = $51,788 NPV
T1 = $1,268,131 NPV

Perhaps the discount rate should be higher at Cooley, because of the increased risk associated with lower job placement rates, higher attrition rates, etc... which would create an even larger disparity...

Wow.. I must have been really bored over my lunch break to have actually done this... At any rate, my point was, from a purely financial perspective, it makes little sense to

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Re: LOWEST LSAT SCORE ACCEPTED
« Reply #22 on: January 30, 2009, 12:45:18 PM »
^

I must say, that's a pretty impressive breakdown. Bravo!

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Re: LOWEST LSAT SCORE ACCEPTED
« Reply #23 on: January 30, 2009, 01:36:56 PM »
Just tell your friend not to waste his/her money going to the lowest ABA accredited school. Don't go to law school if you can't handle the LSAT, sure.
More importantly, don't go to any school that isn't going to guarantee you some sort a job as a consequence of attendance.
 
It should be T-14 or bust. Certainly Tier 1 or bust if that's a bit extreme for you and your friend. Don't hate me for being blunt, this my candid opinion.

This is a terrible post. I'm not commenting on the ABA part, just the "Tier 1 or bust". I understand it's just your opinion, but I find that to be complete BS. Why would you decide to not go to law school because you can't get into what a news agency terms "Tier 1"? I just completed a courthouse internship where I met at least 50 attorneys, probably closer to 75 or 100. I live in a major west coast market. I cant tell you how many people I met from Tier 3/4 that were very busy, successful attorneys. AND, a number of the judges and D.A.s in the building were from "bust" law schools as well.

I was constantly surprised at where people went to school. After being on this board for so long I had taken on the INCORRECT opinion that unless you went to a certain school, your employment prospects are forever doomed.

If you have the ability to be a good lawyer, you will find work. I don't care what school you went to, as long as you are a member of the bar, and you want to practice. Your post is terribly misguided.

Law school curriculums are very similar, and I think a school's name will only get you so far. I know people from T14's that hate their professors and their schools. Your abilities end up fueling your career, not your school's name. 

While I believe this poster is well intentioned, it is certainly misguided. I went to a T4 and transferred to a T20 and I can tell you the difference is remarkable in every way. Every time I see someone telling somebody that the rankings don't matter I cringe. Even if the rankings are bs, they matter to many people so it is in your own best interest to go to the best school you can get into. While it is true that abilities fuel a career, there are simply many doors shut for lower ranked law students. Trust someone with experience in this, go to the best school you can get into.

I never said rankings don't matter. I just told my experience of spending many hours in a courthouse, and explained that I met many people from Tier 3/4's that were very busy, successful attorneys. Now, obviously I only talked to them for limited amounts of time, but I did see the entirety of some of their cases, and while I'm certainty not in a position to give a full critique of an attorneys performance in the courtroom, I certainly saw them win cases. Like I said, one person I met from a Tier 3 was a D.A., and when I asked him if he knew a certain judge he said 'yeah, I went to law school with him'. I remember one case that I watched where the defendant was a national supermarket chain. I remember thinking, I wonder where the attorney they hired went to school. I spoke with him - Tier 2.

It didnt take long before I realized I had a completely convoluted idea of this whole school name/employment thing because of this board.

HYS, your NPV make huge assumptions with the discount rate and starting salaries. To me, it's apples and oranges to compare a Cooley degree to Chi based on those numbers. I'm not trying to say it doesnt matter if you go to a tier 1 compared to a tier 4, I'm just saying that you're not SOL with the latter, simply based on my experience, which I do understand is not a representative sample of the entire country.

I plan on going to the best school that I get into. For some, that will be a tier 2, and I don't think that should stop them from following up on their desire to practice.      

Re: LOWEST LSAT SCORE ACCEPTED
« Reply #24 on: January 30, 2009, 01:50:02 PM »
FWIW, market pay at those firms is starting $160k with $17.5-30k bonus.

Re: LOWEST LSAT SCORE ACCEPTED
« Reply #25 on: January 30, 2009, 04:22:20 PM »
I am not sure I would buy the assumption that going to a Tier 4 law school leads to a salary of $30K with only cost of living increases for the rest of your life because it is far from necessarily true.

My assumption was that the Cooley grad made $47,750 (the Cooley avg.) upon graduation. $30,000 is the salary I assumed the same individual could earn today, without going to law school. Yes, it may not be entirely accurate to assume a 5% annual growth rate, but I assumed the same growth rate for the UChicago grad. In addition, I started the UChicago grad at $145,000, when we know the market rate is more like $165,000.  It isn't uncommon for a BigLaw associate to be making $280,000 in year 8 - my model has the UChicago grad earning right around $200,000 in year 8. If anything, I'm erring on the side of the Cooley grad.

HYS, your NPV make huge assumptions with the discount rate and starting salaries.    

Indeed, which is why i prefaced the whole thing by saying that I'd done "quick, rudimentary" analysis, and explicitly listed the assumptions made. Obviously, the discount rate is the variable that would have the most drastic effect on the data. I used the average rate of unsubsidized student loans (which is right around 7%) as a proxy for the cost of capital. You could probably make a case for for moving the discount rate 100 basis points in either direction.  Still, I used the same discount rate for each scenario, so you can still get an idea of the magnitude of disparity. If you move the discount rate to 6%, the Cooley grad's NPV goes up, but the dollar disparity between the two scenarios grows as the UC grad's NPV increases exponentially. If you move the discount rate to 8%, the dollar amount disparity between the two decreases, but the Cooley grad's NPV ends up being closer to $0.

My starting salary estimate for UChicago grad was left intentionally low at $145,000. The Cooley grad salary estimate was the stated average starting salary of the 82% of the class of 2007 that had jobs within 9 months of graduation. Sure, a Cooley grad might make a bit more or a bit less, but it is entirely reasonable to use the average as a best estimate.

As for the Salaries that I assumed these individuals could earn today instead of going to law school... Average starting salaries for B.S. degrees generally range between $30,000 (liberal arts majors, etc.) and $50,000 (engineering, finance, consulting). Again, in an effort to err to the benefit of the Cooley grad, I assumed that they would have a much lower opportunity cost than a UChicago grad.

Keep in mind that I did throw this analysis together in 15 minutes on my lunch break, but I don't think I made any assumptions that are completely irrational and where I do err, I attempted to do so in favor of Cooley. The point was not to execute an impeccably accurate analysis, but to consider roughly (give or take a couple hundred grand, perhaps) the difference in the average expected NPVs of an education at UChicago vs. Cooley & roughly (within a few years, perhaps) the difference in the amount of time each graduate must work in order for an investment in law school to have a postitive NPV.