Tuesday, March 17, 2015

Lawyer Earnings Increase "Exponentially", Gainful Employment Rule Exponentially Stupid

Martha, My Dear is a rather silly Paul McCartney song that represents a plot point in his long spiral from writing catchy tunes to writing catchy tunes whose author needs a swift kick to the balls.

But I couldn't help uttering the song's title while reading Martha Walters Barnett's enthralling piece on the so-called "Gainful Employment Rule."  For the ignorant (a sharp majority of the readership), the "Gainful Employment Rule" would peg an educational institution's ability to receive student loan benefits to the loan payments of that school's graduates.  In short, estimated annual loan payments should be less than 8% of annual earnings in years 3 and 4 post-graduation.

Barnett, an attorney (retired) with Holland & Knight, sniffs rancid bullshit and brings a fire hose of truthy hot air freshener:
Imagine law schools whose graduates diversify the profession, contribute to the public good and have among the lowest loan repayment default rates. And now, imagine if those law schools were shut down because of a misguided and misinformed federal regulation? 
Shit, let's continue the theme:
Imagine law schools shut down.
It's painful if you try
No rock of justice below us
Life on Earth would die.

Imagine all the people
Needing a lawyer's aid

Imagine there's no loans
It's quite scary to do
No one to pay my salary
No more 3Ls looking screwed

Imagine all the people
Living a lawless life

You may say that I'm a schemer
But I'm not the only one
There's a massive surplus of lawyers
And we need every single one!
If only John Lennon had conveyed that message instead of "peace" and other non-exploitative hippie poo. . .

Back to the article.  Ms. Barnett urges that law graduates are different when it comes to earning those future paychecks*:
[T]he rule shouldn’t be applied on a “one-size-fits-all” basis to programs ranging from culinary schools to law schools. Among other things, the rule ignores the fact that the earnings of graduates of “first professional degree” programs - such as doctors and lawyers - increase exponentially over time. The rule measures "debt to earnings" long before those with professional degrees will tap their higher earnings to pay down their student loans. 
Sometimes I think people must read my work and think "LSTC, you sly bastard, you're making this up!"  No, here, Martha Walters Barnett did.

All the time, I hear law graduates complain, "why did I get a law degree if I'm only making $10.00 an hour folding clothes?"  Well, math whiz, it's time to learn about super-exponententiality.

If you make $10.00 an hour now, that means your earnings will grow exponentially over time.  How exponentially?  Sky's the limit, bro'.  Let's say you have minimal exponent growth factor of 1.1.
Year 1:  10.00 ^ 1.1 = 12.50
Year 2:  12.50 ^ 1.1 = 16.09
Year 3:  16.09 ^ 1.1 = 21.25
Year 4:  21.25 ^ 1.1 = 28.84
Year 5:  28.84 ^ 1.1 = 40.36
Year 6:  40.36 ^ 1.1 = 58.42
Year 7:  58.42 ^ 1.1 = 87.74
Year 8:  87.74 ^ 1.1 = 137.25
Year 9:  137.25 ^ 1.1 = 224.53
Year 10: 224.53 ^ 1.1 = 385.83
See?  With the power of exponential growth, your modest $10.00/hour earnings now becomes the equivalent of $800,000 per year (not including benefits!) by year 10.  Tap that earnings potential and pay down those loans, you mold scraping!  And don't worry - even if you're guaranteed* a lower exponential return rate, it's no doubt higher than the de minimis exponential rate at which your student loans increase.
It is worth noting that if the GE rule were to apply to all ABA-accredited law schools, some well-regarded private, non-profit law schools would fail. Furthermore, if applied to law schools, this rule would encourage institutions to exclude applicants and even dismiss students who would have to borrow significant sums to finance their legal education.
You're damn tootin', Martha.  No way should law schools be incentivized to lower tuition or reallocate scholarship funding to be based on financial need rather than an LSAT score.  Do these jackholes at the DOE not understand the rankings games we play?

The DOE is obviously out of its element.  They need insider help.
Instead of burdening law schools with misplaced regulations, the Education Department should follow the lead of the ABA. 
Nice!  Let's follow it up with a personal touch:
I can personally attest to the quality and practice-ready education offered at one such law school, Florida Coastal, from which my son, a successful practitioner, graduated.
InfiLaw anecdote for the win!  If we were playing propaganda bingo, Martha would be getting the death stare from depressed old people with diabetes, 'cause she's a winner five times over.

To round out the Beatles theme, I would suggest that the DOE is seeking to become the proverbial Taxman; that when you're sixty-four the loans will surely be paid off with your billions; that your law degree will, in fact, give you your money; and that money can buy you love . . . of the lucrative law (also hookers, Paul.  Hookers.).

But perhaps the best words of wisdom can be inspired by one of Ringo's solo efforts:
Got to pay your dues if you wanna wear nice shoes,
And you know it don't come easy.
Hey DOE shrews, don't you read the evenin' news?
JD earnings grow exponent'ly.

I don't ask for much, I only want your trust,
And you can surely trust this ind'stry.
These earnings of mine, they keep growing all the time,
And you know it just ain't easy.
It sure isn't, Ringo, not with all these government fatcats trying to meddle with our free-market exploitation with their "rules."  Law schools aren't like for-profit colleges.   Why?  Because we say so.  That's why.

*not a warranty, guarantee, or promise of any kind; legally-unreliable puffery despite our presentation of such facts as a universal and obvious truth.


  1. Oh here I was thinking someone just studied the actual outcome for the class of 2010 in the state of Ohio...and it looks like hell. Yeah, that happened.

    1. Are you referencing this piece of "scholarship" here:



      I don't know why you'd take interest in such things. Simkovic & McIntire already have done a rigorous study of graduate outcomes. Merritt is a recalcitrant lone wolf with this "let's look at the actual 2010 Ohio results" stuff.

  2. Florida Coastal is ranked No. 4 on the List of the Law Schools where graduates have the most debt (average debt is $162,785).

    In 2013, only 173 out of 562 law school graduates had full time/long term/bar passage required jobs. Out of the 173 graduates who actually got to practice law, 104 were working in firms of ten attorneys of less.

    I'm sure Ms. Barnett's son has a great practice since momma is a retired senior partner at Holland & Knight, oozing with white privilege and also sorts of life-long legal connections. Back in the day when governments actually ran everything, leaders would encourage their children to serve in the armed forces in order to show familial sacrifice for the common good. Now, it seems to be rather fashionable to be able to say one's offspring had a less prestigious/more "diverse" educational experience as if this is a similar sacrifice. But it really doesn't matter where a Biff goes to school since the family's money, privilege and/or connections are going to get him a job regardless.

    If you graduate from a school like Florida Coastal without connections, you are more than likely completely fucked.

    Lady Barista, children at your feet
    Law school took your money to put your ass in their seat
    Now your slinging lattes just to pay the rent
    The rest goes to Sallie Mae to payback what she lent

  3. I can personally attest to the quality and practice-ready education offered at one such law school, Florida Coastal, from which my son, a successful practitioner, graduated.

    This brilliant writer is a former Senior Partner at a BigLaw firm. Yes, with the connections and money of parent like that, you might still have a chance of successfully running a small legal chopshop. So you don't need federal loan money to hhave these schools, you daft bird. Let someone start and run the Waterhead University School of Law so that the lazy and/or stupid children of millionaires can receive a J.D. before their parents set them up with a new law practice. Waterhead University has no ability to place graduates into Biglaw and Midlaw, so there's no need to pretend that there's any financial sense in giving poor students loans so that they can become Waterheads.

  4. I hope it's only law deans, professors and the small percentage of big law winners who are detached from reality. If not we are screwed

  5. Damn, if a lawyer's hourly wage grows exponentially while folding clothes at Target, a non-JD employee's wage should, what, at least double over the same period?

    What the hell is everybody complaining about? The Recession is OVER, folks, just look at the data...!