Recently in Money Category

Granted, you don't usually hear JDs say, "Yeah, I applied to law, med, vet, and dental school...and then chose law."  Considering the number of pre-requisites needed to gear up to apply to any of the medical profession grad programs, there's not a ton of overlap between those graduate programs and law.  Should there be?  Okay, that's probably another topic for another blog.

In this one, we want to look at the Government Accountability Office's (GAO) report pitting law school against the other grad school options in terms of minority enrollment and cost of education. 

The GAO set out to answer three questions:

This week brings an update on the student-loan front: Congress has decided to do something. No, not the total loan forgiveness that some are asking for, but a couple of things that should help, particularly for those who pursue public-interest careers.

The National Law Journal had the story last week, and FindLaw's Strategist followed up with a summary of the key provisions. The College Cost Reduction & Access Act, which was actually signed into law last year and takes effect July 1, includes two programs that can help law graduates struggling with debt from certain types of  loans made or subsidized by the federal government. The first will allow people in qualifying types of jobs -- essentially, public-interest lawyers -- to have their loans forgiven after making payments for 10 years. The second will allow people who meet certain income qualifications to have their monthly payment capped at a percentage of income, and to have debt forgiven after 25 years.

The Project on Student Debt also has created a site, IBRinfo, that describes in fairly clear terms the nature of the two programs, and attempts to direct users to an application process -- no small feat considering that the public-service forgiveness program does not appear to have an application process in place yet.

There are a lot of large firms these days casting about for some kind of long-term fix for their crumbling business models. We wrote in May about Drinker Biddle hitting upon a model which, in the weird world of law firms, actually sounded novel: train your new attorneys to be attorneys! That light-bulb moment was bound to be noticed by other firms, and this week it was. Howrey, the D.C.-based, litigation-centric firm previously known for bringing you litigation bootcamp in place of summer-associate slackitude, has initiated a new training program that amounts to a two-year apprenticeship for its new associates.

The National Law Journal and Above the Law both reported on the "Tier 1 Associate Program," which will start this fall. With bonuses considered, Howrey associates will be paid $125,000 the first year, which will focus on structured training and pro bono work. The second year will see a slight pay bump to $150,000, and an opportunity for associates to work with clients at reduced billing rates. After that, the training wheels come off, and Howrey has (it hopes) a whole new group of litigators who are truly ready to work with clients.

We've written recently about the "movement" (i.e. Facebook page) to have Congress cancel student loan debt. While a blanket cancellation doesn't appear any more likely to happen any time soon, we do have an update on what's likely to come next in the student loan debate.

As reported on Monday at SCOTUSBLOG (with link to cert petition), FindLaw's Strategist, and elsewhere, the Court agreed to hear United Student Aid Funds, Inc. v. Espinosa, which involves the discharge of student loans via bankruptcy proceedings. Such a discharge is statutorily forbidden, of course, so what could there be for SCOTUS to decide? Is the Roberts Court just itching for a chance to do some legislating from the bench, and discover a brand-new constitutional right to be free of burdensome loan debt? Err, no. It's going to be a lot more mundane than that, and you're going to have to keep writing monthly checks.

Espinosa, it seems, listed his debt to United Student Aid Funds as one of the debts to be discharged in his Chapter 13 proceeding. Normally, you can't just do this; you first have to initiate an adversary proceeding in which you prove (while the lender works to disprove) that you have an "undue hardship" that permits your student-loan debt to be included in the bankruptcy.

Last week brought a flurry of legal-blog postings about a new (and Greedy-sounding) book by an attorney/author who goes by "ZZ."  China High: My Fast Times in the 010: A Beijing Memoir is ZZ's memoir of living large in Beijing in the early 2000s, indulging in a no-holds-barred sex-and-drugs lifestyle after being posted to Sidley Austin's Beijing office.  It may be a coming-of-age story, a fascinating expose of modern China, and a cautionary tale about the horrors of the Chinese prison system (where ZZ apparently has a brief stay during the course of the story), but what we really want from this book is a sort of combination career/travel guide for the aspiring international associate.

We admit that we have not read China High yet, but, in true blogger fashion, we are willing to speculate wildly based on whatever meta-information we can glean from the internet, which in this case means book reviews from Bloomberg and the Far Eastern Economic Review.  Here, then, are the questions we would be most interested in if we were actually sitting down to read China High:

There's a little something for everyone in this week's links.  Just find the heading that best describes you, follow the links, and learn:

Summer Associates

• Lawyerist says the summer program is on its way out.
• The WSJ Law Blog thinks it's about time summer programs stopped being fun.  In other news, the WSJ has never been a big fan of fun.

Junior Associates

• Old lawyers and young lawyers gleefully overgeneralize about each other in a panel discussion.  (WSJ Law Blog)
• Time, like everyone else, can't quite believe how much a new BigLaw associate can make for not coming to work.
• E-mail gaffes you don't hear about every day: according to Above the Law, this first-year associate actually meant to reply-all when he decided to call out a firm partner over his choice of legal causes.  In a supposedly unrelated development, said associate is fired the next day.

Sartorially-Challenged Associates

The ABA Journal reports on two sides of the courtroom-fashion coin:

Everyone wants a bailout these days.  Everywhere you look you'll see a group that thinks the U.S. Treasury should issue them a blank check or two to ease their financial pain.  Graduates of this country's institutions of higher learning are no different.

We will avoid throwing around a lot of numbers here as we summarize.  College and graduate school are expensive.  Students borrow an awful lot of money to earn degrees which, their schools promise them, will provide an ample return on investment.  But graduates often find themselves earning far less than they expected, or even unable to find work in the field they've trained for.  Result: monthly loan payments that eat up a huge chunk of income, stretched out over 10- and 20-year repayment schedules.  Many borrowers end up right where they were before they entered school: living in financial uncertainty or barely getting by.

Making matters worse is that federal law makes student loans exceptionally difficult to include in a bankruptcy.  Both federal and private loans are now excepted from bankruptcy discharge, unless the debtor petitions for a determination of "undue hardship."

Is there anything that can help?  A recent USA Today article highlighted a couple of approaches being suggested to help address what may or may not be a student loan repayment crisis.

The week ends, as usual, with a sampling of links, presented today with no general organizing principle.  You'll have to find the meaning in all this on your own:

• Leading off, a reminder of what you should be doing right now instead of screwing around on the internet: getting yourself named Illinois Young Lawyer of the Year, like this second-year at Winston & Strawn.  There is public service work to be performed, people.  Let's get right on it.
• In case you weren't clear on the concept, the NYT reminds you that Justice Antonin Scalia is always good for a colorful quote.  (You might call him the Supreme Court's own . . .  glitteratus, I think.)
• Legal Blog Watch has this week's career alternative: supplement that marginally-useful J.D. with . . . a nursing degree?  I did not see that coming.
• Greed Goes Global: The Am Law Daily's headline is all the explanation this link needs.
  
• USA Today reports on the persistence (and non-dischargeability) of student loan debt.  Take heart, though: at least your federal loan debt will be cancelled when you die.

At one firm it is going to happen.  Will it catch on elsewhere?

The Legal Intelligencer reported on Monday on Philadelphia-based Drinker Biddle's new plan for its new associates (registration required), and it looks very different from what other large firms have been doing in response to the decline in their profits.

According to the Intelligencer, new associates are going to start as planned this fall, rather than being deferred for up to a year, as is happening at other firms.  Their first six months will be spent in a program of both formal training and shadowing of more senior lawyers.  They will not be required to bill, and the pay will be at a reduced annualized rate of $105,000.  Salaries, and billing expectations, will increase after the six months of training.

Drinker Biddle clients should be excited about these developments, since it will likely mean the end of being billed for the unproductive hours put in by the most junior associates.  Many clients, at Drinker and elsewhere, already demand that first-years spend little or no billable time on their matters.

Law schools are also likely to respond positively.

This week in Greedy Links: you are legally in the clear to provide legal opinions to your clients, just maybe a hint of a recovery for the legal profession, and a couple of novel places to look for a new job.

This Week's Ethics Lesson:

• The Washington Post reports that Jay Bybee and John Yoo will not face criminal sanctions for their "torture memos," and that, given state bars' lack of subpoena power, they aren't likely to face professional sanctions either.  In other words, it is in fact ethical to perform legal research and then supply your client with confidential memoranda summarizing that research.  Everyone can go back to work now.

The State of the Profession:

• Good news first: according to the Am Law Daily, big corporations may be looking to loosen the purse strings a little and spend a bit more money on outside counsel.
• But the WSJ Law Blog still sees recovery delayed until 2010.

And everywhere you look, there's a story about the slow capitulation to the need to reduce BigLaw salaries.

• The WSJ Law Blog reminds us that they urged the salary-cutting weeks ago.
• The ABA Journal believes that firms are thisclose to a critical mass on slashing salaries.
• The National Law Journal has a choice quote or two from associates who can see the writing on the wall.