Debt Follows Attorneys Long After Law School


    Feb. 25, 2006
    Long Island Business Review
    By Claude Solnik


    LONG ISLAND, N.Y. - When Scott E. Kossove graduated from Touro Law Center in 1997, a promising future awaited him, starting with a position at L'Abbate, Balkan, Colavita & Contini. But like a growing number of young lawyers, he also had a big pile of debt left over from undergraduate and graduate school.

    "It's definitely more of a worry when you're a younger attorney. It affects so many parts of your professional life but [also] your entire life," Kossove said. "I have friends who can't afford to buy a house, not just because of the expensive nature of real estate on Long Island. Their student loans are such a major factor in their personal life in terms of purchasing property and what jobs they can take."

    Law school students get into deep debt trouble not only because of high tuition costs but also because they borrow to cover living expenses. It's known as "costs of attendance," according to Michele Kaminiski, director of financial aid at Touro Law Center in Huntington, N.Y.

    "There's a cliche: If you live like a lawyer in law school, you're going to live like a law student while you're a lawyer," Kaminski said.

    According to the American Bar Association, the average tuition and fees for a private law school rose from $16,798 in 1995 to $26,952 in 2004, including a 5 percent jump from the $25,574 tuition average in 2003.

    To help pay for that education, students attending private law school borrowed an average of $76,563 in 2004-2005, according to the ABA. The group listed the average amount borrowed at Hofstra at $88,417 and $78,360 for Touro Law Center. New York University weighed in with the largest average, at $108,470. That's above the $81,975 for Harvard and $101,848 for Northwestern University.

    "As tuitions and other expenses of attending law school rose, more and more students found that they need to borrow," according to "Lifting the Burden: Law Student Debt as a Barrier to Public Service," a study by the ABA.

    Relatively flat starting salaries further augment the problem. According to the National Association for Legal Professionals' 2005 Associate Salary Survey, the median salary for first-year associates was $100,000, ranging from a median of $67,500 in firms with two to 25 attorneys to $125,000 in firms of more than 500 lawyers.

    "The last time we saw salaries jump for recent graduates was 2000. Since then, they really have been flat," said James Leipold, a NALP spokesman. "It's a complicated phenomenon. It has to do with the health of the economy and the health of the legal economy. After the dot-com boom and bust, there was a lot of retrenchment. And there was some real caution in proceeding with salary hikes."

    Flat enrollment at law schools hasn't helped starting salaries, either. According to enrollment statistics provided by the ABA, total first-year enrollment slipped 0.2 percent in 2005 to 48,132 from 48,239 in 2004.

    More graduates would lead to more competition, Leipold explained. "When the legal economy heats up, the big law firms try to bring in a slightly larger starting class, a bigger group of first-year associates," he said. "That increases the competition."

    In New York, while salaries may be higher than average, debt can climb into the six figures, according to Kossove, who heads the New York State Bar Association's Special Committee to Study Student Loans.

    "It affects their choice for what they want to do," he said. "There are a lot of people who indicated to us they would have liked to go into a public-service position. When they come out of law school with six figures in student debt, they can't afford to take those jobs."

    Legislation may help the situation, Kaminski said. President Bush signed the $12.7 billion Deficit Reduction Act into law on Feb. 8, which included the federally backed Grad Plus loan program. It comes with a 6.8 percent fixed interest rate, she said.

    Kossove said his committee is considering advocating changes in federal legislation to relieve the "incredible burden of student loan debt" through changes in tax codes, increasing the amount that can be deducted and raising salary limits before deductions are excluded.

    Despite the struggles, Kaminski said a law school degree, even with rising tuition costs, is likely to pay for itself. "Look at it as a capital investment," she said. "There's a huge potential for a huge return on your investment in time and money. You can't afford not to go."



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