Bar News - October 14, 2011
Opinion: How Bankruptcy Can Save the Legal Profession
By: John OíConnor
I will never forget this quote delivered by the commencement speaker at my law school graduation: "Live within your means or youíll be living by someone elseís rules." A solid piece of advice meant to be implemented on a going forward basis: donít buy a house or car you canít afford, save money, shop at Costco, donít borrow money to go to law school, etc. Wait, what? Who would have guessed that more than half of my class had unknowingly violated the speakerís Poor Richard-like principles on the day of their graduation simply because they had chosen to pursue a career in law?
Weíre Becoming Dentists
Iíve never understood dentists. Sure, I go to the dentist and enjoy my free toothbrush and floss as much as the next guy who hates going to the dentist. But when you decide to go to dental school, youíre deciding to clean peopleís teeth for a living. Nothing more, nothing less. Yes, the money will be good but youíll always be a dentist. A career in law is supposed to be different. Once you receive your JD, there is no telling what the future may hold, what clients you may represent, what innocent you may save, what policy changes you may spark, what public office you may attain. Lawyers can become rock stars, lawyers can soar, achieve, kick ass. Lawyers can help. But not anymore. Itís not about helping, itís about surviving. The law school route is starting to resemble the dental school route, only with a lot less money. Gone are the noble aspirations and big dreams. The "lucky" lawyers these days perform acts of pure drudgery that can barely pass as a law practice, their swollen loan balances keeping them tethered to a career they can barely stand. Thereís money to be made in the law, but increasingly itís not as a lawyer.
Most of Us Donít Have a Book Deal
Lawyers in general and especially young lawyers cannot afford to pay their student loans. Law school debt has reached epic proportions, saddling new generations of lawyers with unmanageable monthly payments and pervasive cynicism towards their chosen profession. Indebted lawyers are forced to take jobs that betray their ambition and passion in order to keep up with mortgage-sized student loan payments. Theyíre so far in the red that crawling out seems like a pipe dream. Hell, President Obama didnít shed his student loan debt until the royalties from Dreams of My Father started rolling in.
Casual Drag Queen Friday?
But its just as much about the crowd as it is the debt. According to The New York Times, 43,000 J.D.ís were handed out in 2009, 11 percent more than a decade earlier, and the number of law schools keeps rising, nine new ones in the last 10 years, and five more seeking approval to open in the future. There are too many lawyers and too many law schools. Competition isnít fierce; itís frantic. Iíve known Biglaw partners who would change office dress code from "business casual" to drag if their best client so decreed. As lawyers, weíre in the service industry, but there are limits. A massive oversupply of law degrees has flooded the market, diluting the talent pool and raising the bar of client and employer expectations. Lawyers are forever the seller in a buyerís market. Everyone shops for a deal because they can. Bill 3,000 hours a year? Sure. Work on Saturday and Sunday for months in a row? Sure. Neglect personal health to answer that phone call or send that email? Sure. Who needs vacation? Not us lawyers, weíd rather be drafting documents, filing motions. Itís no wonder lawyers are disgruntled. We didnít go to law school to make mediocre money, live in debt and get fat. It must stop and it starts with the ABA. No more new law schools! Our alma maters have let us down as well. Stop lying to prospective students about their job prospects. Stop massaging employment data so you can collect more in tuition.
Bankruptcy is the Solution
Allowing law school loans to be discharged in bankruptcy would shift accountability to the schools that mislead students with doctored statistics and promise careers that do not exist. Law school contraction would inevitably follow as lenders would underwrite far fewer legal educations. Lawyers already saddled with enormous debt would be given the opportunity for a fresh start just the same as the consumer who can no longer carry their credit card burden.
"Investing" in a law degree is no different than any other failed investment except that bankruptcy is an option for the over leveraged real estate developer or unemployed banker. The bankruptcy option would turn off the spigot of borrowed money, causing law schools to close and the ranks of lawyers to shrink. Quality of life would improve as would the mental state of the bar. The cloud of cynicism would begin to lift. Happy lawyers would be better lawyers. The sun would shine, birds would chirp, weíd finally be living by our own rules and within our means.
John OíConnor is founder and president of the National Bankruptcy Forum and a consumer protection attorney focusing on large, complex litigation. His article was published on his website, www.nationalbankruptcyforum.com.