The Most Important Pre-LSAT Test You’ll Ever Take

How much money do you have? No, this is not a question before I try to sell you something you probably don’t need for way too much. It is, however, a question one should ask before deciding to buy something—in this case, a legal education.

A law degree is required to practice law. In that sense, it’s a “union card” for the profession. (For those unfamiliar with unions, the old union card was required to show membership and thus eligibility for jobs that were generally well-paying, protected, and assigned by seniority…all based on membership in the union. No card, no job.) This is intended here not for any political meaning: it simply is. One result of this monopoly power—the right to set law school graduation as a condition of bar membership—is that law schools thus enjoy a relatively price-insensitive market: they can charge almost anything they want, as the value of what they’re “selling” is quite high.

Yet there’s more. Law schools face two constraints that increase even further the upward pressure on tuition: First is a set of ABA requirements that, individually, are quite sensible. Taken together, however, they add enormous cost to the operation of a law school. It is possible, not surprisingly, to take issue with the sensibility of these requirements. A physical law library, for example, is indisputably one of the most expensive components of a law school. It is not, however, as indispensible as it once was. Indeed, it’s possible to argue that it is quite dispensable: a computer, internet connection, and research account will match even the largest physical libraries in all but the most esoteric searches. And the computer can be more effective—meaning more inclusive—and far faster. How many students even look at physical books anymore, unless required to do so? (No, this is not a shock to those in legal education. Indeed, the ABA and various judges, professors, and practitioners have been discussing this for some time.) Law schools wishing to retain accreditation must thus spend large sums of money on faculty, facilities, libraries, research, and so on. This, of course, adds to the upward pressure on price. Yet there’s more: The nature and impact of law school hierarchy on cost.

A test was done once with chocolate. Blocks of unlabeled chocolate were put in a bin, at a price of $3.99 per pound. The retailer later took the same chocolate and relabeled it at $9.99 per pound. Under ordinary supply/demand logic, sales should have plummeted. Guess what happened? That’s right…the expensive chocolate sold more. The lesson for a retailer? When there’s an absence of meaningful criteria available to a consumer upon which a purchasing decision can be made—More cocoa! Looks browner!!—the variable that is relied upon as an indicator of quality is price. Thus, perversely, a higher price can result in more sales (and much more profit), as consumers use price as a proxy for quality.

Law schools noticed a similar and highly useful corollary: when the first schools started raising their tuition (ordinarily a tricky task), they found themselves with more, not fewer, applicants. Instead of rebelling against higher costs, the message seemed to be “We’re not cut-rate! We’re just like the expensive guys!”

These two forces add pressure to raise tuition rates to whatever the prevailing rates are—and those are set by the top private schools. There’s a historical precedent at public schools as well. In the 1950s, Michigan realized that with its relatively small population it couldn’t compete against the best law schools, so it raised its tuition to nearly match the top private schools—and proceeded to invest those funds into building a world-class law school. It worked. For nearly any employer, a candidate from the University of Michigan holds considerable weight: it’s “almost-Harvard.” This is not meant disparagingly. The University of Michigan’s law school is truly world-class. And, philosophically, there’s something to be said for not providing, in essence, a state subsidy to beneficiaries who are often from and will almost certainly be among the wealthier of that state’s residents.

In contrast, the University of Texas at Austin, the flagship public school in Texas and a strong regional player for much of its history, was the beneficiary of revenues resulting from the state’s propitious gift of vast tracks of land nearly a century before. Happily, oil was discovered, and with two-thirds going to the University of Texas System (with the remaining one-third going to the Texas A&M System), UT–Austin was able to buy its way into the realm of world-class institutions through a different largess: luck. Recently, Texas’ tuition rates have nearly matched those of the top private law schools as it too realizes the inevitable calculus: for a law school, higher tuition is a no-brainer. With 1,500 law students, that’s millions of dollars of additional revenue every year…the equivalent of many tens of millions of dollars in foundation money that can pay for much to boost a school’s standing against other law schools. So, the schools would argue, this is actually money well spent on behalf of students—defensively at least, and competitively at best. In sum, the costs of attending any law school have risen faster and higher than just about any other academic endeavor. And the costs of attending even a public law school have risen, often steeply.

For you, this leads to a discussion that might be one of the most important in Getting In. Three years of law school will now cost between $110,000 and $125,000…not including books, fees, and living costs. This means that you’re looking at total costs of nearly one-quarter of a million dollars. And this does not include opportunity costs. If, for example, you’re making (or could make) $40,000 per year now—not an unreasonable assumption, yes?—that means that spending three years will cost you an additional $120,000, plus seniority and promotion opportunities, 401(k) matching contributions, medical and other benefits, and a hit to your “net present value,” or the cumulative effect of earnings carried forward. In total, law school will cost you between one-third and one-half of a million dollars.

If you’re not gasping, the answer to the question above must be that your numerous trust funds can take care of such piddling amounts without even needing the trustees’ signatures. If so, good for you, and a raised glass of Cristal Brut 1990.

For the other 98.9% of us, this is something to ponder. I was serious, by the way, in my comment about older generations not being condescending. I, for example, was a beneficiary of the University of Texas’ largesse, as the tuition rates for the law school were counted in the hundreds, believe it or not, and that was in 1989. If memory serves, tuition was already rising but was then less than $1,000 per year. (The law school had higher rates than for other programs. The undergraduate programs cost $4 per credit hour, in-state. That is not a misprint. Four dollars per credit hour.) Law school tuition rose rapidly during my time there to about $3,000 per year when I left in 1991. With scholarships, I paid between zero and a few hundred dollars per semester. I had no money, true, and had to borrow anyway. But that was a different world…in more than just time. My blind discounting of opportunity costs then and my relative ignorance of just how much was being given to me…these made it easy to simply go. That I had a lackadaisical attitude about a law job was rather easy given that there was so much less on the line.

My own story is perhaps a bit out of the ordinary, so I hardly use myself at the personal benchmark. In case you’re curious, I came from a family that believed strenuously in egalitarianism, and in hard work. This meant manual labor, often involving animal by-products. There was also a firm disbelief in parents paying for college—a concept so foreign that it still takes me aback. From the time I was 13 we were involved with renovations, culminating in the design and building of a home in Austin in which we all lived over the years. It was thus easy not to consider costs: rent was zero, living costs close to that, and Austin a haven (then) for impoverished students such as I. So I ended up, after three degrees, with about $30,000 in debt, nearly all of which had gone to pizza, $1 movies, $300 Chevettes, and the occasional $25 IBM Selectric typewriter bought at an auction, fixed, and used throughout grad school.

As you might imagine, even if your town still has $1 movies, the approach that worked for me would hardly work today. I graduated and went to work for a firm in Honolulu. As it was Hawaii, the cost of living was higher, the salary was lower, and I began making student loan payments that seemed quite high—a few hundred dollars per month. This would be quite modest today. Somehow, loans don’t quite seem real when taking them out. They do become real later, however.

As I mentioned, I had not wanted to practice law…and so found myself working at a new court in one of the states of the newly Federated States of Micronesia, about 2,000 miles west-southwest of Honolulu, and from there into business and teaching, two passions of mine. The point? If you’re about to enter law school, you had better seriously want to practice law. It almost doesn’t matter what kind. As I’ll get into later, despite the assumption that only the “best” law jobs are the ones to have, that’s simply not true. It is possible to live well on a modest salary, including repayment of debt. In any event it won’t be possible to simply wish away one-hundred-twenty-thousand-plus dollars in debt—not counting undergraduate debt. On a 10-year loan, that’s a payment higher than for a house. Even the post-school pressure for loan consolidation, while easier in the short-run, is often worse in the long-run. As you start your career, this will feel quite oppressive, indeed.

Are there ways to reduce this burden? Yes, there are. More in Getting the Gold. For now, however, the important question is whether or not you have a real answer to “Why Law School?”

If it’s just to bide your time for three years, don’t do it.

If, as mentioned, you really want to teach, or to spend your hours and years doing research, then get a Ph.D. Are the markets bad there too? Well, in many cases, yes they are. But it will hardly help you if you have the wrong degree for what you really want to do.

Would you enjoy a more fast-paced business environment? If so, then go to business school. On a purely financial level, the calculus for business school is generally better than for law school. It is certainly energizing.

Do you really want to…[whatever it is that you really want to do]…? Whatever your “really want to” is, you should follow that dream. Your dream.

In all, this is not to dissuade…unless you are being dishonest with yourself. With the right attitude, law school is wonderful, and even many aspects of law practice are enjoyable, even thrilling. But they won’t be with the wrong attitude. And that wrong attitude is almost certain to follow if you go into law school for the wrong reasons, or for no real reason at all.

This is from the preliminary chapter, “Getting In,” on pages 44-48.