A few days ago, Michael Graham, the Boston Globe, and Paul Caron (of the TaxProf blog) reported that the dean of New Engalnd School of Law is paid $867,000 per year. Only about a third of graduates of the institution find jobs that require or suggest a Juris Doctor degree, but both tuition and enrollment have skyrocketed over the past few years.
If a corporation raised costs, decreased the quality of goods, and paid its CEOs more money than anyone else in the industry, that corporation would either go out of business or be the subject of an Occupy Wall Street protest. A for-profit corporation, operating in a free market, could not behave this way. However, a “non-profit”, funded by a well-intentioned federal government intent on sending kids to school, can do frightening amounts of damage to young people’s lives without incurring the wrath of politicians, bureaucrats, or OWS. Any debts incurred to for-profit corporations (credit card companies, mortgage companies, on your cell phone bill) are dischargeable in bankruptcy; student loans are not. Those schools get their money no matter what, and the lenders get it from you, no matter what, with no risk of loss. (That risk of loss is what keeps companies in check in the free market.)
The prospects for young lawyers are beyond dismal. One ad is for an attorney with up to three years of experience, who will primarily work as a paralegal, will segue into an attorney position, is expected to work long hours, and pays thirty grand a year. Yeah, those are the loss-leader years, of sorts, wherein one is paid badly, gains experience, and leverages it into better pay years from now. But if you’ve spent seven years and three hundred grand in higher education, you should be making more than a receptionist.
This is not an isolated ad, put out by a delusional and greedy partner: Glenn Reynolds reported that starting salaries for lawyers have sunk to pre-1985 levels. (Story here.) Now, I’m a rock-ribbed capitalist, so let me explain this problem: the government does not pay as well as law firms, and law firms rely on private enterprise for business. When you kill private enterprise via regulation, the government may increase its hiring, but it’s paying less than law firms do, doesn’t hire as many people as the private sector loses, and creates incredible competition for those positions.
If you want to work in M&A, you need at least two viable companies that are willing to pay the bills. Diminished research and development, due to diminished returns (i.e. increases on capital gains and increased regulation), you kill the patent law sector. Businesses that don’t exist don’t hire for litigation, tax law, or transactional law. The irony is that liberal, government-loving lawyers, who firmly believe that companies need them more than they need companies, have strangled their own profession.