Debt can weigh heavy on law school graduates
Finding employment in competitive field can be a challenge, writes.
Recent law graduates are leaving school today with debt loads that might have them entering the working world with a lower standard of living than when they were students.
In a piece written for the Council of Canadian Law School Deans, Bradford Morse, dean of law at B.C.’s Thompson Rivers University, cites statistics from a 2014 study that sets potential law school debt for University of Toronto Faculty of Law graduates in the area of $120,000.
The study found that a law graduate would have to earn $162,000 a year to repay a loan of that size at seven per cent interest in 10 years. Based on a first year associate’s median salary of $66,000 a year, the study concluded that paying the loan back even within 20 years is “next to impossible.”
By 2016, according to a Canadian Lawyer survey, the average salary for new calls was $73,000, up from $65,000 in 2015 but down from $80,000 in 2014.
Recruiters bear out these numbers. “Current starting salaries are between $65,000 and $85,000 for small firms, and up to $110,000 at large firms,” said Lana Driscoll, client partner at ZSA Legal Recruitment in Toronto.
Even after seven years, Canadian Lawyer found, median pay was but $125,000, meaning that it would be some 30 per cent below the $162,000 Head estimated was required for paying off the $120,000 loan in a decade.
Still, Sara Lutecki of Robert Half Legal in Toronto said lawyers are ahead of other graduates.
“It is little more difficult for lawyers to find jobs, but once they get in, first-year associates make significantly more than entry-level graduates in finance or technology,” she said.
MBA graduates, according to Statistics Canada, also paid a whopping average of $27,754 in annual tuition; the average law school tuition of $11,385 pales by comparison.
By way of further comparison, dentistry fees were $21,012, fees at medical schools were $13,858, pharmacy students paid an average of $9,738, engineers doled out $7,825 and teachers’ tuition came in at $4,580.
But then there’s the little hurdle of finding a job, let alone a well-paying job, in the first place. Job Bank Canada’s Outlook Report rates job prospects for lawyers in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and the Yukon as “fair.” Prospects in British Columbia, Prince Edward Island, the Northwest Territories, Nunavut and Quebec, however, are “good.”
The upshot is that finding employment for lawyers is in the range of fair to good. Coupled with the brouhaha about the lack of articling jobs in various parts of the country, this suggests that a significant number of graduates will take a while or might never get to the fat salaries necessary to pay off their loans with reasonable dispatch.
As it turns out, the U of T claims that some 95 per cent of its students find jobs on graduation. That may be an anomaly relative to other law schools. Or maybe it’s just that you get what you pay for: U of T’s fees are roughly 50 per cent higher than what York University’s Osgoode Hall School charges. They’re also more than 15 times what McGill University’s Faculty of Law charges Quebec residents, and almost five times what Canadians other than Quebecers pay at McGill. Either way, Quebec is by far the cheapest place to attend law school in Canada. Otherwise, as of the 2015/16 academic year, only the University of Victoria and the University of Manitoba come in under $10,000 annually.
For her part, Driscoll said that the picture for budding lawyers isn’t as financially gloomy as the numbers might suggest. “The graduates I interview don’t talk about debt, mostly, I believe, because they knew what they were getting into, and had plans in place,” she said. “More and more, I’m meeting recent grads who had part-time jobs in law school or tried to do other things to keep their debt down.”
Besides, Driscoll said lawyers go to law school not just for the dollars, but because it’s their chosen profession. “But that which doesn’t really answer the question of how to pay down their loans.
However that may be, the options for staying ahead of the game for young lawyers are threefold: incur as little debt as possible, go to a law school with reasonable fees, or do everything possible to get the marks and resumé required to get a job at a top-paying firm.
Otherwise, most lawyers won’t have time to worry about how they’re doing compared to other professionals: they’ll be too busy coping with the debt.