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Terrible job market: Is this true?

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20 minutes ago, OnlyResident said:

I get that they all not big law as some are smaller boutiques, but the MAG numbers arent even included in that, I only see about 5 positions that are not private practice (Public Prosecution of Ontario and Office of the Ombudsman). Don't most of the boutiques on that list also pay the same as the national firms? So isn't top 25% rather conservative for the amount of people that get a competitive salary? Especially for UofT, Oz and Western? 

Sure, although I’ll note that not all the boutiques pay Bay Street rates, and the DOJ certainly doesn’t. But it doesn’t really matter. 

In fact, this is rather my point. Prospective students spend a lot of time worrying about whether they have 25% or 30% chance of getting a big law job, while completely ignoring the 50% chance they’ll be below average and the significant chance (whether that be 10%, 15%, whatever) they’ll end up on the low end of the bimodal salary distribution making $20k their articling year. 

Edited by BlockedQuebecois
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2 hours ago, BlockedQuebecois said:

The opportunity cost of debt has two dimensions.

The first dimension is simply the interest you pay on it. 

The second dimension is foregone earnings on the money you pay towards the loan. In the example I provided, monthly payment is approximately $1000/month for ten years. If you didn’t have that debt, that would be money that could be earning you returns. So to figure out foregone earnings, we calculate the compound interest on an investment starting with $16,071 (the investment account established during the three years of working instead of law school) with monthly deposits of $1000. That yields an account balance of roughly $202,000, from which we subtract the $100,000 principal of the loan and the initial $16,071 (to avoid double counting).  

Not to be pedantic, but opportunity cost only has one definition or as you put it one dimension. 

Opportunity cost is defined as the loss of potential gain from other alternatives when one alternative is chosen. 

The opportunity cost of the money you use to pay tuition is what else you could have earned with that money had you used it for something other than tuition. 

The interest you pay on the loan you take out to pay tuition is simply a cost (of borrowing), it is not an opportunity cost. 

Edited by OWH
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44 minutes ago, Cheech said:

Spot on. This has been my experience in the engineering field. Most ambitious individuals aspire to move out of technical work and towards business/management positions. Otherwise, your earnings potential is limited (this is also not counting software engineering, of course, which doesn't really work like traditional engineering fields).

How did you arrive at $302,671? Shouldn't it be 86,600 (cost of the debt) + 16071 (foregone savings) + 100000 (cost of school) = 202,671?

But even so, why stop the analysis at 10 years? Most of us have a 30 odd year career ahead of us. The differences between the two lifestyles diverge even more so after that point.

Actually both you and Bloc are wrong in your cost calculations. 

Neither one of you have calculated the income foregone while attending law school. 

Also, what you are both doing is calculating the true cost of law school, not the opportunity cost. 

True cost = actual cost + opportunity cost. Both you and Bloc have added some actual costs (ie tuition) and called it an opportunity cost. The real opportunity cost of tuition is not what you pay for tuition, but rather what else you could have done with that money. 

I apologize if this all seems overly pedantic, but my undergrad was in economics. 

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14 minutes ago, OWH said:

Actually both you and Bloc are wrong in your cost calculations. 

Neither one of you have calculated the income foregone while attending law school. 

Also, what you are both doing is calculating the true cost of law school, not the opportunity cost. 

True cost = actual cost + opportunity cost. Both you and Bloc have added some actual costs (ie tuition) and called it an opportunity cost. The real opportunity cost of tuition is not what you pay for tuition, but rather what else you could have done with that money. 

I apologize if this all seems overly pedantic, but my undergrad was in economics. 

I was under the impression that opportunity cost is the return on the foregone option minus the return on the chosen option. Could you not reasonably include the cost of tuition as a negative return on the cost of the chosen option? And would interest paid not constitute a similar negative return on the cost of the chosen option? 

I've never heard of true cost used in this manner – I'm more familiar with it in the context of including externalities in the cost of commodities. Any good resources on true cost as being actual cost + opportunity cost? I'm interested to learn more

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4 minutes ago, BlockedQuebecois said:

I've never heard of true cost used in this manner – I'm more familiar with it in the context of including externalities in the cost of commodities. Any good resources on true cost as being actual cost + opportunity cost? I'm interested to learn more

I really like this book. https://www.amazon.com/Cost-Benefit-Analysis-Concepts-Anthony-Boardman/dp/1108401295

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3 minutes ago, OWH said:

Actually both you and Bloc are wrong in your cost calculations. 

Neither one of you have calculated the income foregone while attending law school. 

Also, what you are both doing is calculating the true cost of law school, not the opportunity cost. 

True cost = actual cost + opportunity cost. Both you and Bloc have added some actual costs (ie tuition) and called it an opportunity cost. The real opportunity cost of tuition is not what you pay for tuition, but rather what else you could have done with that money. 

I apologize if this all seems overly pedantic, but my undergrad was in economics. 

For the record, I was just clarifying Blocked's equation as he seemed to have make a mistake in arithmetic, not providing my own formula.

Nevertheless, doesn't his formula take into account income foregone while attending school? It assumes that you would spend everything on living expenses (rent/food/car/debt service), while the rest (roughly 10%) is saved and invested. Thus the net amount you would have ended up with after working those 3 years is simply the 10% of salary saved + interest. Similarly, the 100k student debt figure would have to include living expenses incurred at school (income earned at school - expenses, which nets to 100k debt).

You're probably right on the true cost vs opportunity cost front though. I don't know enough about the terminology to really comment about that.

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12 minutes ago, Cheech said:

For the record, I was just clarifying Blocked's equation as he seemed to have make a mistake in arithmetic, not providing my own formula.

Nevertheless, doesn't his formula take into account income foregone while attending school? It assumes that you would spend everything on living expenses (rent/food/car/debt service), while the rest (roughly 10%) is saved and invested. Thus the net amount you would have ended up with after working those 3 years is simply the 10% of salary saved + interest. Similarly, the 100k student debt figure would have to include living expenses incurred at school (income earned at school - expenses, which nets to 100k debt).

You're probably right on the true cost vs opportunity cost front though. I don't know enough about the terminology to really comment about that.

I think at the end of the day what matters is net worth. If after 10 or 20 years, the average net worth of someone who went law school is higher than someone who didn't, then it was a worthwhile investment, at least financially speaking. Opportunity cost relies on a lot assumptions (i.e. savings rate and investment returns) that are not based on reality. The savings rate among Canadians is less than 2%, so if this hypothetical person who didn't go to law school and entered the workforce instead is living basically paycheck to paycheck, is he/she really that better off? 

Edited by OnlyResident

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17 minutes ago, OnlyResident said:

I think at the end of the day what matters is net worth. If after 10 or 20 years, the average net worth of someone who went law school is higher than someone who didn't, then it was a worthwhile investment, at least financially speaking. Opportunity cost relies on a lot assumptions (i.e. savings rate and investment returns) that are not based on reality. The savings rate among Canadians is less than 2%, so if this hypothetical person who didn't go to law school and entered the workforce instead is living basically paycheck to paycheck, is he/she really that better off? 

There are a number of additional issues though, even if your net worth is higher eventually. For example, most professionals look to have kids or a house in their early thirties whereas a lot of law graduates are carrying debt that makes it hard. Also how hard you have to work for that money. 

On an aside opportunity cost makes no assumptions on savings rate or investment returns. The opportunity cost of law school is foregone earnings during law school. Whether that is $30k/yr minimum wage type jobs or $150k/yr for a professional. 

BQ is mistaking the time value of money for opportunity cost which is wrong. Costs are calculated at a point in time.

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27 minutes ago, Mal said:

On an aside opportunity cost makes no assumptions on savings rate or investment returns.

A big econ nerd like me might conduct a sensitivity analysis to see how different returns and interest rates effect net benefits and costs.

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On 8/3/2020 at 3:44 PM, CleanHands said:

There is a sociopathic lack of personal responsibility and self-awareness on display here, and a laughably unconvincing attempt to shift blame.

How can you take this seriously enough to think it warrants any substantial discussion here?

This pretty much. Her personal anecdote is just some attempt to wash out a big personal failure from her relative.

I don't doubt there is serious discrimination though, since you see things like an almost entirely white workforce among a few downtown toronto law firms, which stands out like a sore thumb since you won't see this kind of racial discrepency for other workplaces in toronto.  

PS is your profile pic from the game Hunt Showdown? Use to play it a while back, was quite addictive, one of the few video games I got hooked on. 

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On 8/3/2020 at 11:07 PM, Baristachamp said:

Sure, bad things can happen to good people. But thats not very relevant to the conversation. But if you are known for being say in the top 90th (good) percentile of what you do and you are able to sell yourself then there will be work for you. Thats not naive or really that optimistic.. be good at it and you will get hired. If you're not hired either you aren't good enough at it or people don't know you are good at it. 

I don't think this is necessarily true. Alot of hiring is still based on some partner's biases or inclinations, which obviously is severely impacted since alot of one's own personal, racial or gender biases aren't apparent. Law firms are still stuck on a 20th century mentality of assessing ability based on this. 

E.G one of my law school friends was in the top 5% GPA wise but didn't get hired by a single big law firm. She has a very talkative personality and a sharp conversationalist although a bit "different". Other friend was about the same, just as smart person but a more docile and sensitive personality, who was given multiple hiring offers. Personality factors in here for obvious reasons, since one type can be seen as a threat and which does not reflect the abilities of said person. 

Implicit bias is a big problem and area of research for businesses and human resources, and you can see how these types of biases also play out on racial and gender lines too. If you've seen the movie Moneyball, it explains why intuition is a poor way to assess fitness and its one of the reasons why big companies e.g. tech develops sciences behind recruitment.

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47 minutes ago, mazzystar said:

PS is your profile pic from the game Hunt Showdown? Use to play it a while back, was quite addictive, one of the few video games I got hooked on. 

Yeah! Good eye and taste in games; I've mentioned it a few times in the video game thread here and always got crickets.

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42 minutes ago, mazzystar said:

This pretty much. Her personal anecdote is just some attempt to wash out a big personal failure from her relative.

I don't doubt there is serious discrimination though, since you see things like an almost entirely white workforce among a few downtown toronto law firms, which stands out like a sore thumb since you won't see this kind of racial discrepency for other workplaces in toronto.  

PS is your profile pic from the game Hunt Showdown? Use to play it a while back, was quite addictive, one of the few video games I got hooked on. 

This is a quick note, and not intended to dismiss racism as a general topic. But the comparison you've just used deploys a fallacy of reasoning that causes a lot of well-intentioned people to see racism where it may not exist, or at least to claim proof of racism in a way that doesn't stand up.

The legal marketplace in Toronto is drawing from a pool of national talent. In order to decide if racism is playing a role or not (and note, I'm not denying it does play a role) you need to look at who is working in these national law firms and compare that group of people to national demographics. I agree it creates a situation where the workforce of lawyers at a law firm in Toronto doesn't look the same as the workforce of baristas that are serving them coffee. But despite this dynamic, it's still the case that people are moving across the country to work at these law firms and no one is moving across the country to take a job at Starbucks.

This is also true of law schools, btw, and other professional schools. Is the class in U of T law school, or med school, less diverse than their undergraduate programs. Hell yeah. And racism may play a role. But if all you do is compare one to the other and say "see, see!" you are just cheating yourself rationally and making an easily demolished argument.

The reason I make this point often is because I see smaller communities in Ontario quite often, and it just floors me how incredibly different these realities are. Yes, in Toronto very often I'd be the only white person on a bus, if I still took the bus anywhere. And if that's what you're used to seeing, the line up of white faces at a national law firm can feel incredibly wrong. But there are whole towns in Ontario where you'd almost never see a non-white face - not because people are driving them away, but just because immigrants aren't moving there. To imagine that major employers who are drawing from everywhere in the nation should look only like the cities in which they are located is as stupid as being comfortable with no visible minorities at all.

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1 hour ago, Diplock said:

This is a quick note, and not intended to dismiss racism as a general topic. But the comparison you've just used deploys a fallacy of reasoning that causes a lot of well-intentioned people to see racism where it may not exist, or at least to claim proof of racism in a way that doesn't stand up.

The legal marketplace in Toronto is drawing from a pool of national talent. In order to decide if racism is playing a role or not (and note, I'm not denying it does play a role) you need to look at who is working in these national law firms and compare that group of people to national demographics. I agree it creates a situation where the workforce of lawyers at a law firm in Toronto doesn't look the same as the workforce of baristas that are serving them coffee. But despite this dynamic, it's still the case that people are moving across the country to work at these law firms and no one is moving across the country to take a job at Starbucks.

This is also true of law schools, btw, and other professional schools. Is the class in U of T law school, or med school, less diverse than their undergraduate programs. Hell yeah. And racism may play a role. But if all you do is compare one to the other and say "see, see!" you are just cheating yourself rationally and making an easily demolished argument.

The reason I make this point often is because I see smaller communities in Ontario quite often, and it just floors me how incredibly different these realities are. Yes, in Toronto very often I'd be the only white person on a bus, if I still took the bus anywhere. And if that's what you're used to seeing, the line up of white faces at a national law firm can feel incredibly wrong. But there are whole towns in Ontario where you'd almost never see a non-white face - not because people are driving them away, but just because immigrants aren't moving there. To imagine that major employers who are drawing from everywhere in the nation should look only like the cities in which they are located is as stupid as being comfortable with no visible minorities at all.

The reason why I pointed to comparisons with other workplaces is that it also pretty much draws from the national workforce and its a good reflection of a different hiring process. If you are looking at recruitment for the Big Five banks, or the Big Four auiditing firms, they are more systematized and much more diverse.

Ontario law schools are very diverse, probably less diverse than say business management given that it draws more people from homogenous schools and regions. I wouldn't doubt if visible minorities make up 20-30% of a given candidate pool from my own and from visiting other schools. Most law firms are quite diverse and reflects this, yet I can count a number of prominent law firms which have 5-10% visible minorities on their articling roster.

These sorts of issues compound with time and grow bigger if it isn't addressed IMO. There's already a pretty widespread perception of law firms being 20th century laggards compared to other industries and imo its only a matter of time before pressure grows for them to change. 

Edited by mazzystar
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1 hour ago, CleanHands said:

Yeah! Good eye and taste in games; I've mentioned it a few times in the video game thread here and always got crickets.

Lol still a niche game compared to others but probably one of the best designed ones I've seen. Still the only game that caused me to shake with adrenaline, sometimes I would shake too much to play. I use to have dreams about intense situations and shootouts. 

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On 8/3/2020 at 11:48 PM, BlockedQuebecois said:

Back on topic, I actually do think that people in Canada, particularly in Ontario, should give more thought to going to law school than many do. But I agree that OP's questions are based on faulty premises. 

.....

A lot of people struggle out of law school. They find it hard to get a job. When they get a job, it isn't well paying. They earn less or similar to what they could have earned had they entered the workforce when they went to law school. If they went to an Ontario law school and used credit to pay for it, they're paying off a six-figure loan with a mid-five-figure salary. That's stressful. The economics of the profession often force those people into small practices, sometimes making them small business owners when they'd really rather be an employee. 

....

One of the reasons I am going to Manitoba over Ontario is because the Tuition in Ontario is unconscionable. Toronto's Tuition is 3x Manitoba's for more or less the same degree. On top of that Ontario is opening another law school this year pushing the market closer to saturation.

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Thank you all for the information! you guys are so kind. 

Based on the replies, it seems to be very difficult to know whether a firm is racist or not just by looking at the race distribution (but there are firms that have a predominantly white workforce for sure, we just can't pinpoint the underlying reason) . Sometimes people have unconscious prejudice/discrimination that they don't even know themselves. I found this test on implicit bias by the ABA which you can use to test whether you have any unconscious bias : https://www.americanbar.org/groups/litigation/initiatives/task-force-implicit-bias/implicit-bias-test/

I think the Ontario law schools are getting more diverse. But I am not sure whether the firms, especially the non-big ones are putting an effort into having diversity. I also don't see a lot of diversity in the government and in the supreme court. Not sure whether it is because that the minorities just never went for these positions or the minorities are just not doing as well as the others or whether there is an actual issue with implicit or even explicit bias. Somehow I feel like medicine is more diverse than law, but perhaps it's because that our chief public health officer which is non-white, got a lot of exposure on the media for the past few months 🧐

It might be due to my ignorance in the field, but I couldn't name >5 minorities in law that are occupying top positions in Canada or are well know in general. Looking at the most influential 25 lawyers in 2019 makes me feel like the field is not diverse at all. Again, this is just what I think based on what I am seeing. 

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11 hours ago, Diplock said:

To imagine that major employers who are drawing from everywhere in the nation should look only like the cities in which they are located is as stupid as being comfortable with no visible minorities at all.

Is this not a moot point considering the Toronto firms draw students from Ontario law schools which comprise of mostly students from Ontario and urban cities in Ontario as well?  Also, law schools today have large radicalized populations too (anywhere between 35-50% of any class). Yet, none of this is reflected in the articling classes of Toronto firms. 

https://www.law.utoronto.ca/about/jd-first-year-class-profile

https://www.osgoode.yorku.ca/admissions-survey/

https://law.uwo.ca/future_students/jd_admissions/PDFs/Diversity_Survey_Results_2019_WEBSITE_FINAL.docx.pdf

https://law.queensu.ca/programs/jd/class-stats

Edited by OnlyResident
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32 minutes ago, OnlyResident said:

Is this not a moot point considering the Toronto firms draw students from Ontario law schools which comprise of mostly students from Ontario and urban cities in Ontario as well?  Also, law schools today have large radicalized populations too (anywhere between 35-50% of any class). Yet, none of this is reflected in the articling classes of Toronto firms. 

https://www.law.utoronto.ca/about/jd-first-year-class-profile

https://www.osgoode.yorku.ca/admissions-survey/

https://law.uwo.ca/future_students/jd_admissions/PDFs/Diversity_Survey_Results_2019_WEBSITE_FINAL.docx.pdf

https://law.queensu.ca/programs/jd/class-stats

One thing that needs to be clarified in this discussion is, are we only referring to Biglaw and Bay Street as "Toronto firms?" Law firms in Toronto outside of Biglaw are a lot more diverse and racialized. Many racialized law students and lawyers are also working in legal clinics, government, and public interest positions. If we look at the entire legal market in Toronto, and not just Bay Street, there are a lot of racialized lawyers now. I know of many firms in the GTA and Peel regions that are entirely made up of racialized lawyers as well. 

Yes, Bay Street is less diverse than the rest of the legal marketplace, but these jobs make up only a very small slice of the pie.

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56 minutes ago, OnlyResident said:

Is this not a moot point considering the Toronto firms draw students from Ontario law schools which comprise of mostly students from Ontario and urban cities in Ontario as well?  Also, law schools today have large radicalized populations too (anywhere between 35-50% of any class). Yet, none of this is reflected in the articling classes of Toronto firms. 

https://www.law.utoronto.ca/about/jd-first-year-class-profile

https://www.osgoode.yorku.ca/admissions-survey/

https://law.uwo.ca/future_students/jd_admissions/PDFs/Diversity_Survey_Results_2019_WEBSITE_FINAL.docx.pdf

https://law.queensu.ca/programs/jd/class-stats

According to what? Is there a self-identification survey for articling students at Toronto firms that we can actually sort of compare with some honesty to the self-identification surveys from the schools? Because absent something like that, I'm not sure how the bolded claim can be supported. I hope people aren't just looking at pictures of firms' articling rosters and deciding who is white or not because that is incredibly dubious. Edit: I went to law school with a number of people who are visibly white but would not identify as white. Some even had very "white" names. 

Even the white people in Canada are diverse though. Honestly, I find this type of racial head-counting repulsive for some reason. Should law firms make positive efforts to have a cohort of hires that matches the diversity of our country? Yes. Should that be policed by categorizing everybody and giving firms racial quotas? Yuck. 

Edited by BringBackCrunchBerries
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