LLM: Lawyers Losing Money

American University’s Washington College of Law (WCL) is in crisis. Situated in the toughest job market for lawyers in the United States, the Washington, D.C. school has fallen 11 spots in the U.S. News rankings since the class of 2013 applied. This is in part due to the release of detailed employment statistics that show the schools’ full-time, long-term legal employment rate of 39 percent ranks 5th out of 7 area law schools. A group of students have started a petition to fire Dean Claudio Grossman and a WCL theatrical troupe staged a play, “Grossman’s Eleven,” alluding to the 2001 heist movie starring George Clooney. The school is undergoing a $130 million expansion and has moderately grown its LLM program—a once rare post-graduate degree whose recent proliferation is becoming to critics a symbol of unscrupulous law school practices.

American is not alone in growing its LLM program. From the early 1970s to the late 1990s, the LLM was a marginal degree aimed primarily at foreign students and a few American lawyers looking for specialized knowledge in areas like tax law. An LLM is not necessary to work as a lawyer, no member of the Supreme Court holds one, and successful pursuers of the Master in Laws will end with more education than most of their professors. Since LLM candidates take the same courses as JDs, students earning a first degree in law, they require little overhead. LLM students often pay the same tuition as JDs and rarely receive financial aid. Schools are not required to report any job stats for LLM graduates, meaning students cannot investigate either the salary or nature of the work a typical graduate from the program can expect to land. LLMs also cannot hurt a school’s U.S. News ranking since their qualifications aren’t disclosed, meaning schools admit less-qualified applicants into their LLM programs. In the context of the massive threats to revenues law schools are now facing, it’s easy to see why the degree referred to by critics as a “cash cow” is growing in popularity at schools around the country. Although LLM students comprise less than 7 percent of law school enrollments, the total number of LLM degrees has risen 65 percent in the past decade, including, since the financial crash, an abundance of new programs aimed at U.S.-trained lawyers, such as Nebraska’s LLM in space law or NYU’s in environmental law. Given the lack of data and their generally poor reputation with big law firms, most lawyers and law students who’ve heard of the degree tend to view non-tax LLM programs as cash grabs.

Law schools seem to have earned this cynical evaluation. Even after the 2007 financial crash that decimated legal jobs and dried up pay, many institutions continued claiming 90 percent or higher employment, failing to differentiate between grads’ six-figure Big Law jobs from servers pulling part-time shifts in restaurants (of which there were many). Up until very recently, most students were under the impression that the average law school grad would find employment and start with a salary in the upper five-figures, even outside a large firm. When the American Bar Association (ABA), the accrediting body in charge of regulating law schools, finally forced schools to release detailed job figures in 2012, the public saw evidence of what disgruntled graduates had been claiming for some time—distressingly low employment rates and salaries for huge numbers of new lawyers, even at highly-ranked schools. Law school applications were falling before 2012, but the nosedive accelerated after the detailed data were released.

Before that, however, law schools cashed in. Each year from 2006 to 2010 saw record enrollments of first-year law students and new highs for average tuition. When the bubble burst in 2011 and applications started trending toward a 30-year low, revenues threatened to follow. During the good times, law schools hired more teachers, raised salaries, and increased support to their parent universities—improvements that quickly become regarded as normal and necessary.

Since schools must now be transparent about employment numbers, many are seeking to maintain revenues by lowering their admissions standards and venturing further into what Paul Caron, a visiting professor at Pepperdine University calls the “unregulated wasteland” of the LLM. The ABA does not require schools to publish employment figures for LLMs and does not plan to. Law schools are still free to disseminate these numbers but the few that do, such as New York University and Northwestern, often release stats that are not up to ABA standards for JD outcomes. To critics, the lack of transparency is strikingly familiar to the opacity surrounding JD employment numbers pre-2012.

“The lack of data tells you something,” says Brian Tamanaha, a professor at Washington University in St. Louis and author of the book Failing Law Schools. “Certainly if they were paying off quite well, schools would be advertising that.” Despite the lack of data, critics are quick to question the value of an LLM—“LLM stands for Lawyer Losing Money,” says University of Colorado-Boulder professor and frequent law school critic Paul Campos. Even tax, often considered an exception to the bad-LLM rule, may be losing its luster in a weak job market flooded with more and more LLM grads every year. “It’s almost a ‘don’t ask, don’t tell’ kind of attitude,” says Caron, an expert in tax law who has co-authored guides for selecting a LLM program in tax. “It’s a shame there’s not more information available.”

At American University, there is some data on the degree (released for this story), albeit limited. In American’s law and government program, from which about 20 U.S.-trained students graduate every year, the employment outcomes “look a lot better than American’s outcomes look for their JD students,” says Kyle McEntee, founder of the law school watchdog organization Law School Transparency, with only three out of 27 graduates in 2012 listed as unemployed. Similar Washington, D.C.-based programs, like Georgetown’s LLM in national security law, or George Washington’s in government contracts law, are designed to help students land government jobs—and may be successful in doing so. Georgetown LLM student Matthew Bisanz says he thinks employment outcomes at his school may be similar to those for JDs, somewhere around two-thirds in full-time legal jobs, but there is no way to be certain without reliable data, something most D.C. schools say they don’t have.

“On the JD side, every law school devotes substantial resources to tracking down graduates and confirming employment. Because the ABA does not collect these data from LLM programs, we have never done it,” wrote Georgetown Associate Dean of Graduate Programs Nan Hunter in an email; her school has grown its LLM program by about 90 people since 2007. “I don’t have any time or ability to sit and collect data on this stuff,” says Professor Daniel Gordon, director of the LLM in government procurement at George Washington, which has founded two LLM programs since 2007. “Frankly, because of the widely different countries and different variables about where people are in their careers where they come, I’m not sure [employment data] would be very meaningful for us,” says the director of American’s LLM in international law, David Hunter. American founded a new LLM program, in trial advocacy, last year, which so far has only one employed graduate.

This lack of transparency means it is difficult for prospective students to weigh the cost of an LLM against the salary they can expect after graduation. Which could be a serious problem at schools ranked lower than Georgetown (14), George Washington (21), and American (56) where reputations may not be as strong or the path to a specific type of employment, such as government work, may not be clear. The high cost of an LLM—close to or over $70,000, including cost-of-attendance at the D.C. schools mentioned—on top of the average $125,000 in debt a JD holds from private school makes the lack of transparency more troubling. Even at a big law firm, with a salary in the low  six figures, a debt-load close to $200,000 would be difficult to manage; on a government salary, it would be daunting.

Despite the downsides, LLM programs continue to grow. And while many U.S.-trained LLM students are professionals looking to improve their skills who continue to work at their current jobs, a significant, and likely increasing, number are either fresh out of law school or victims of underemployment. They may see an LLM program as a good place to network or to improve their credentials if their JD is from a lower-ranked school, no matter what the cost.

Gage Javier, a student in American’s law and government program, says, “the LLM cost is all but the drop in the bucket.” Both she and Lyne-Robert Desroches, also at American, say federal programs such as Income-Based Repayment (IBR), which will allow them to eventually discharge their federal student loan debt—faster, if they get government jobs— provided they make the proper payments, were in the back of their minds when they started their LLMs. Bisanz says IBR is regularly discussed among both LLMs and JDs at his school. Georgetown and American both advertise IBR on their financial aid pages. "IBR is supposed to be a life raft," says McEntee, but for many students, it is becoming part of the standard plan.

When IBR debts are discharged the government will pick up the tab, so it’s easy to imagine the program becoming a political flashpoint as costs rise. And while the LLM is only a small contributor to the student loan mess, it’s indicative of deeper problems. Last month, American faculty went on a retreat to discuss “the professional development and career aspirations” of their students, according to an email sent to students from the dean. It’s clear that the “career aspirations” of those like Javier and Desroches remain high and LLM directors show no sign of stopping their courtship of economically stressed JDs in the bleak legal job market. At least for now, the proverbial cash cow shows no sign of drying up.

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