Law School Applicant “Capitulation”

Back in 2008 or so, a VC reader told me that because of my blogging about the housing bubble in 2004-05, he put off buying a house and was very glad he did.  Now, he said, he was wondering when would be the best time to buy a house from a capital gains perspective.  I responded that the best time to buy real estate, or really any investment, is when “everyone” is saying it’s a terrible investment.  On Wall Street, when buyers have almost disappeared from a market, and prices seem in permanent free fall (as in March 2009), it’s referred to as “capitulation.” (Both then and in October 2008, I was busy buying closed-end mutual funds, which “capitulated” to an even greater degree than the market as a whole, and for which I had an objective measure of their relative undervaluation.)

If we’re not as this stage with regard to demand for law school, we are damn close, with applications running about half the level  of six years ago.  Law school certainly isn’t for everyone, and how worthwhile economically it might be for anyone in particular has to start with that individual’s opportunity cost and where he gets admitted–it’s a very different decision if you currently are thriving as a consultant than if you are currently advancing your barista skills at Starbucks, and very different if you get into Harvard than into a newly accredited school in a saturated legal market, and very different if you can keep your current job and get an automatic pay raise (as in some government jobs) for getting a law degree and if you will likely need to hang out a shingle but have poor social skills.

But there hasn’t been a better time to apply to law school in a long time, if ever.  Worried about going into debt?  Go to a law school school somewhat below where your credentials would allow, and they will shower you with aid–just for example, I heard from one VC reader who got into only Cardozo and Fordham last year, and Cardozo offered a free ride.  Always dreamed of going to a top 10 law school?  You may never have less competition than now.  Want to keep your current job and go part-time, but got rejected a few years from the only law school in town with a part-time program?  This year, they will probably take you.

I don’t want to get into a debate whether law school, in general, is “worth it,” because once again it’s a matter of both opportunity costs and opportunity.  How “worth it” is it nowadays to pursue an alternative like a Ph.D. in anthropology or history, a masters’ degree in journalism, an MPP, or to go back to school and get the proper credentials to become a public school teacher?  Young people are struggling in all sorts of fields, but young law grads seem to have much larger megaphone than unemployed teachers, journalists, and historians.  The result spells potential opportunity for prospective law students, if they look at the situation with eyes wide open to the costs and benefits..