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Jun
13
Bankruptcy attorney calls for more banking reforms
Filed Under bankruptcy, economy | Comments Off
Michigan bankruptcy attorney Michael Greiner suggests three things Washington should do to reform the banking industry:
1. “Pass bankruptcy reform legislation that will allow bankruptcy judges to reset residential mortgages.”
2. “Require banks to lend more aggressively to small businesses and homeowners.”
3. “Break up the banks.”
What do you think?
Is it time to reform the nation’s bankruptcy laws to allow bankruptcy judges more power to assist homeowners who are underwater with balances owed on mortgages that are more than the value of their homes?
Should we call on our political leaders in Washington, D.C. to change lending rules to require banks to lend more to small business and homeowners to help stimulate the economy?
Should we break up banks so that banks are not “too big to fail” and thus are insulated from the consequences of bad decisionmaking?
Jun
4
Does Indiana need another law school?
Filed Under education | Comments Off
Indiana Tech recently announced that it plans to open Indiana’s fifth law school in Fort Wayne.
Is opening another U.S. law school the right thing to do at a time when there is arguably an oversupply of legal talent and a dearth of law jobs? NALP’s figures show 2010 law graduates are “the lost generation,” according to Above the Law.
Next year’s graduates (Class of 2011) can expect the trend to remain the same because “legal employment tends to continue to decline in the years after a recession.” (PDF).
The American Bar Association’s Law News Now reports that a record low number of recent law graduates have jobs that require bar passage. Other recent law graduates are stuck in dead end document review jobs, including one honors graduate who is suing her law school saying it mislead her regarding job opportunities.
Lawyer salaries have fallen so much that some out-sourcing firms are now keeping projects stateside, instead of sending them overseas to places such as India. Writes the New York Times: “Legal temp companies now pay as little as $20 a hour to lawyers for document reviews that a decade ago might have been billed at $200 an hour.”
Even academics giving law graduation commencement speeches are telling law students to lower their expectations and to “get over” expecting high paying jobs:
Emory University law professor Sara Stadler thinks law grads need to stop coveting high-paying jobs that just aren’t available. And she said so in a commencement speech earlier this month.
“Get over it,” Stadler told law grads. “The one thing standing in the way of happiness for many people is a sense of entitlement.” The Fulton County Daily Report covered the speech.
Indiana Economic Digest writes that it might not be the best time to open a law school:
Applications to law schools nationally and regionally are expected to dip this year, jobs in the legal industry have been dwindling and the internal structure of the profession is changing rapidly.
It may not appear to be the best time to consider starting a law school, which is what is on the table at Indiana Tech. …
… NALP reported that members of the 2009 graduating class nationally were more likely than previous classes to be working part time, working a temporary job or working in a job that does not require a juris doctor degree.
The University of Delaware has delayed plans for a new law school and law school applications are down across the country as students realize that the cost-benefit analysis points to better job opportunities elsewhere.
Joe Hodnicki at the Law Librarian Blog writes that demand for legal services and the ability of clients to pay the amounts new grads will need to pay off their student loans isn’t present these days.
I personally don’t think the demand is there. And if it is, I don’t believe that many of those 447 people per lawyer would be willing to pay the rates a new lawyer would be forced to charge to pay back school loan debts.
Indiana Attorney Paul Ogden seconds the view that the legal job market is over-saturated — firms aren’t paying new attorneys salaries, just commissions on work they happen to bring into the firm.
According to Indiana Tech, we don’t have enough lawyers in the State of Indiana. Try telling that to recently admitted attorneys who hit the job market only to find there are no jobs. Every year, Indiana licenses hundreds of new attorneys. Yet if you look at university job boards, you’ll regularly see maybe 4 or 5 legal job openings listed. The math is not good. Near the end of the press conference, a reporter said that perhaps a law degree could be useful in other areas, an idea which the Indiana Tech spokesman endorsed. That’s not reality. The reality is that once you have that law license, you’re pigeonholed as an attorney and you’re probably not going to be considered for non-lawyer jobs.
New Indiana Tech grads will have to ask themselves if they’ll be able to build a book of business that will be able to support the $1000+ they’ll have to pay per month to the Department of Education or other student loan lenders to get their loans paid off in 10 years? Will they be able to afford a house payment if they incur massive student loan debt? Will Indiana Tech law grads be able to afford to start a family? Will Indiana Tech grads be able to pay off their student loan debt before incurring new student loan debt when their children go to college? These are the questions potential students will have to take into consideration before committing to $84,000+ in student loan debt (not taking into account high annual tuition inflation rates).
On a practical note, why would anyone want to go to a brand new school with no reputation and no law alumni base when people who do the hiring in the legal field routinely only look at applicants from the top First Tier schools for the most elite jobs.
Writes Courtney Comstock in the Business Insider:
Earlier this year, Lauren Riviera, an assistant professor at Northwestern, published research about how top firms like hedge funds and investment banks only hire from “top tier” schools. …
The report says elite law firms, investment banks, and consultancy firms are only looking for recruits from the “top 5,” Harvard, Yale, Princeton, Stanford, and Wharton, according to her research.
A new Indiana Tech law school doesn’t make economic sense for students and for the state. The only people who will make money will be the school officials who collect the tuition payments funded by non-dischargable student loans. Pumping out 100 new attorneys per year to try to find jobs in the Fort Wayne area will be a recipe for economic disaster in the local legal field.
Elie Mystal at Above the Law writes of Indiana Tech’s planned law school:
Does somebody have to die? Does somebody have to commit suicide? Does somebody have to leave a suicide note that reads, “I just couldn’t go on paying off the debts I incurred from going to this law school”? What is it going to take before somebody, some organization, some kind ofregulatory authority steps in and prevents universities from opening up debt-generation shops under the guise of providing legal education?
