Is It Worth It to Go to Law School in Lieu of an MBA Program?

Question:

I have been doing some research on lawyer salaries and this is what I have concluded: Lawyers, in general, are not that well compensated relative to number of years in grad school, cost of the degree, opportunity cost and relative difficulty of field.

 
This is most likely due to the forces of supply and demand (too many lawyers). Even law students that graduate from an excellent school and do very well (top 10 percent) do not really get paid that well. The starting salary at the top firms are around $160,000 with bonus, but when factoring in opportunity cost of going to law school, number of hours worked, and salary potential, it does not look too lucrative, especially considering that lawyer salaries typically plateau after some years, unless one is fortunate enough to make partner. (But that's a negligible minority).

Now my question is this: First, would you consider this an accurate analysis of the legal salary structure? In light of all this, would it still be worth it to go to law school, in lieu of an MBA program, to gain valuable skills, but just not practice law?

I'd be very interested in hearing your thoughts. Thank you.



Answer:

I think that you have an accurate picture of the first year salaries for New York attorneys who work at the major New York law firms. However, it seems that your priorities are a bit skewed.

I know of many people in professions other than the law who put in long and hard hours at work and do not make close to a $160,000 base salary their first year on the job. Some of these people do not make anywhere near $160,000 over their entire career lifetime. And yet your research has told you that lawyers are not that well compensated. What planet are you on? When did a first-year salary of $160,000 plus bonus become peanuts?

Indeed, you must spend three years in law school, the costs of the degree are overwhelming, and the field requires a keen and sharp mind along with tremendous stamina. However, it seems to me that someone right out of law school is quite green and should be pleased with a starting salary of $160,000 plus bonus.
 
By the way, this is not what the majority of attorneys earn. Your research has unearthed the compensation of a very small percentage of attorneys and, for the most part, all of them in New York, Los Angeles or San Francisco.

The reality is that most attorneys out there in the world will spend their lifetime practicing law and may never see the kind of salary that a first-year attorney at a major law firm in New York will earn right out of school.

You mentioned that in spite of the low pay, you might go to law school not to practice law but to gain valuable skills. What skills do you expect to take out of law school that might take the place of an MBA? Writing skills? Analytical thinking skills? A disciplined mind? Presentation skills? The ability to think on your feet? The ability to think under pressure?

Certainly all of those skills will be part of what one takes away after three years of law school. But don't you think that you would walk away with the same, or at least very similar, skills if you went for an MBA or any other graduate degree? A sharp mind is not only attributable to attorneys; many other professions require the same skills.

I went to see my internist last week. He spent over 45 minutes with me and I had a co-pay of only $15.00. How much more do you think the insurance company reimbursed him for my office visit? Certainly not enough to cover 45 minutes of his time based on the cost of medical school, time spent on an internship and residency, hours on call around the clock, malpractice insurance, office staff, etc. And yet, he continues to practice medicine. Does money need to be the only determining factor one should use when deciding what profession to pursue?

Although the cost of a legal education is something that needs to be taken under consideration, neither the cost nor the eventual salary should be the determining factor of whether or not one should be an attorney. You have asked if you should go to law school in spite of the costs; not to practice law but to pick up valuable skills that you think would take the place of an MBA. This makes no sense to me at all. Take the MBA courses if your interests are in the business world rather than in the legal community. Ask any graduate of B-school and they will tell you about the wonderful skills they developed during their graduate studies.

I do know of many professionals with law degrees that have never practiced law but, instead, use their J.D. to help them with other careers. In your particular case, however, I do not suggest that you go that route since you seem to think that the cost of the education is not worth the end product.

By the way, it seems that you have decided that lawyers are underpaid because there are too many lawyers out there. Just to clear this up, ask any headhunter if there are too many lawyers out there in the world. The attorneys that are earning the kind of money that came up in your research are exactly what you described. They are coming out of the top law schools and at the top 10 percent of their class. What do you think we are talking about here? It is probably a lot less than 1 percent of the entire attorney population.

I said in the beginning that your numbers were skewed. Most attorneys never reach the $160,000, much less in their first year. Therefore, your research has to take into account that many attorneys take on all that law school debt and probably never earn more than $100,000 (or less).

Why would anyone take on such debt, such hard work, such an unpleasant profession as you have described and not even make big bucks?

Well, perhaps the answer is that the intricacies of the law provide attorneys with such mind-expanding challenges that the money becomes secondary. Perhaps successfully representing a client is a reward in and of itself. Perhaps walking in the footsteps of great legal minds is the greatest compensation. Talk to some managing partners of law firms and listen to what they have to say about their noble profession. I think you might have a different view of the practice of law if you actually got out there and spoke to some of the members of the legal community.

My experience over the years with attorneys has shown me that, as a group, they are analytical, intelligent, patient and wise. Their purpose is to guide and help. Yes, the financial rewards certainly can be significant (although you might argue that one with me), but I have yet to meet a lawyer who is in the law simply for money. It takes a very special type of person to be an attorney, and that is something that you need to take under consideration the next time you start to deride the legal profession.

Summary: Would it be worth it to go to law school, in lieu of an MBA program, to gain valuable skills, but just not practice law?