Inside Track: New Lawyers are in a Financial and Emotional Depression, Says State Bar Task Force:

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  • New Lawyers are in a Financial and Emotional Depression, Says State Bar Task Force

    Times are rough for new lawyers, according to a recent report released by the State Bar of Wisconsin. Among the normal struggles that all new lawyers face, they are also dealing with unemployment, underemployment, and law school debt.

    Joe Forward

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    anxiety stress indecisionDec. 18, 2013 – Terrified. Disheartened. Disillusioned. These are some of the words new lawyers are using to describe their struggles in the legal profession, as revealed in a State Bar of Wisconsin report discussing the challenges facing new lawyers.

    Attorney Arthur Harrington, co-chair of a task force created in 2012 to study the issue, recently stood before the State Bar’s 52-member Board of Governors and read anonymous comments from new lawyers who responded to a survey questionnaire.

    More than 200 new lawyers answered the following open question, among others: “Please feel free to tell us anything about the challenges you face as a new lawyer.”

    Answers Sobering

    New lawyers cited huge law school debt, unemployment, underemployment, or inadequate pay among the various struggles they face.

    “Even though I’ve had a job for the past five months, I don’t feel like I have any job security, and I’m terrified of being back in the job market,” one lawyer said.

    “My debt is higher than a mortgage for a nice house. It’s all I think about. And I know I will be strapped in a job I don’t want paying debt for the rest of my life,” said another.

    “I’m buried under debt. I’m terrified that this is what the rest of my life is going to look like. I’m also scared to start my own practice, because I don’t have the practical litigation experience. I can’t afford a pet, let alone kids. I live paycheck to paycheck. It’s very, very scary and disheartening,” was another response from a new lawyer.

    Another lawyer said the job search left the lawyer feeling “suicidal” and “terrified.” The lawyer also feels alone and scared of making a mistake in practice but is hesitant to tell anyone about these mental struggles for fear of being disbarred.

    These types of answers left Harrington to pronounce that new lawyers “are facing a depression, both economically and emotionally.” Lee Turonie, a task force member and past president of the State Bar’s Young Lawyer’s Division, said the lawyers who made these sorts of comments “are fast becoming your average member of the State Bar.”

    Sherry Coley, co-chair of the new lawyer task force with Harrington, urged the board to consider implementing some of the recommendations discussed in the “Challenges Facing New Lawyers Task Force: Report and Recommendations.”

    For instance, Coley said the board should urge the Wisconsin Supreme Court to move quickly on the bar dues structure change the board already approved a year ago. The change would cut dues in half for the first five years, instead of the current three years.

    Addressing larger, systemic changes to help new lawyers will require collaboration from multiple entities and organizations, notes Coley, including law schools.

    The Struggles

    The Challenges Facing New Lawyers Task Force – composed of 10 lawyers appointed by then-State Bar President Jim Brennan in 2012 – compiled statistical, anecdotal, and other sourced information that describes the struggles for new lawyers.

    For more than a year, the task force gathered information on new lawyers and what they face after graduation, hoping to develop short-term and long-term solutions.

    The task force held listening sessions at the law schools, consulted numerous reports and articles, and conducted a survey of Young Lawyers Division (YLD) members. It also solicited input and information directly from other State Bar members and groups.

    What the task force found is a population of new Wisconsin lawyers who are struggling to make ends meet. Many go months without finding a job. Others take jobs that don’t require a law degree, or at salaries that are too low to meet monthly debt payments.

    “Anecdotally, we all know that new lawyers are having difficulty coming out of law school with student debt and finding jobs, or finding jobs that pay enough to service the debt,” Coley said “But I don’t think we really knew the extent of the problem.”

    Between 2008 and 2010, the legal sector lost a reported 45,000 jobs nationwide and reductions continued through 2011. Law firms hired less and budget constraints impacted public sector hiring. But the number of U.S. law school graduates was still climbing as of 2011. That year, there were 44,495 J.D. degrees awarded, consistent with a 30-year upward trend. However, a recent report said law school enrollment for 2013 was down 11 percent.

    When law students do graduate, they have fewer training opportunities, the task force noted. Traditionally, law firms have trained first-year associates. But law firms are now less willing to train new lawyers, because clients won’t bear the cost, according to a report by the Massachusetts Bar Association (MBA).

    In the medical profession, by contrast, Medicare funds new doctor training through medical residency programs that pay residents about $40,000 to $60,000 per year, the MBA report notes.

    “There are more residency positions available each year than there are graduates from U.S. medical schools,” the MBA report states. In addition, after completing residency, a physician is virtually guaranteed a job averaging $150,000 to $350,000 per year.

    In Wisconsin, the typical entry-level salary for associates in private practice at a firm with 6-25 lawyers is $50,000, according to the State Bar’s 2013 Economics of Law Practice in Wisconsin Survey Report. This entry-level salary is on par with starting salaries for prosecutors and public defenders. Smaller firm lawyers typically earn less.

    About 80 percent of the 599 new lawyers who responded to a task force survey earn about $42,000, and indicated that they work in firms with less than 20 lawyers.

    Some new lawyers say these salaries cannot support the debt payments they are required to make under normal 10-year repayment plans. There are loan forgiveness programs for lawyers working in public-interest jobs, but those jobs are limited.

    Law students carry an average student loan debt of $90,000. But that’s just an average. Andrew Beilfuss, a member of the State Bar board and a partner at Quarles & Brady, said he knows lawyers with upwards of $300,000 in law school debt.

    “Some of them, even those making more than $100,000 per year, still cannot dig out from the debt,” Beilfuss said. “If they ever want to do something else, they feel trapped.”

    There are student loan repayment programs that help borrowers reduce monthly payments to a small percentage of income. Only those with “financial hardships” qualify, and monthly payments may not cover the monthly interest, causing the debt to balloon. Loans can be forgiven after 20-25 years, but forgiven amounts are taxable.

    This dire situation leads some commentators to ask: aren’t the lawyers at fault for going to law school and incurring these debts in the first place? Coley points out that many were already enrolled when the 2008 economic crash occurred. She also says that many lawyers don’t go to law school for the money. They go to help people.

    “People didn’t know how bad the problem was until they were already in law school or had graduated from law school,” Coley said. “Many others choose law school as a calling to help people and serve justice, and the legal profession needs them.”

    Short-term Recommendations

    To help new lawyers who are struggling financially, the task force made several short-term recommendations, including ones that may ease financial burdens.

    Sherry Coley and Arthur Harrington

    Sherry Coley and Arthur Harrington are cochairs of Challenges Facing New Lawyers Task Force. In 2012, then-president Jim Brennan appointed 10 members to the task force. Coley and Harrington recently presented the report’s findings to the Board of Governors.

    The task force recommends that the State Bar of Wisconsin offer reduced-rate CLEs to new lawyers, to the extent it has the budgetary means to do so. It also encourages local bar associations to develop low-cost, in-person luncheon CLE programs.

    “We think of this new generation of lawyers as high-tech and technologically savvy, but these new lawyers also want traditional in-person access to experienced lawyers,” Coley said. “We should create affordable networking and learning opportunities.”

    To give lawyers more access to experienced lawyers, the task force also recommends developing a mentorship program, allowing mentors to obtain CLE credit.

    In some states, such as South Carolina, every new lawyer must complete one year of mentoring, and mentors get CLE credit. Assuming the board approved a new mentorship program, the Wisconsin Board of Bar Examiners (BBE) oversees CLE requirements, meaning any program granting CLE credit needs BBE approval also.

    Ensuring that law students understand the importance of practical skills courses offered at law schools requires increased communications with students, the task force says. It also recommends publicizing and promoting the results of surveys and reports that can help potential law students decide whether law school is the right path.

    The State Bar should support more practice management and business training opportunities, the task force explains, while noting the State Bar is exploring new programs along these lines and forging partnerships with outside groups to help.

    As mentioned, the board approved a dues structure change for new lawyers that would also them financially in their first five years, Coley said. The Wisconsin Supreme Court must approve that proposal. The court is scheduled to consider it next month.

    Other Recommendations

    In the long-run, helping new lawyers “may entail shifting certain paradigms,” the report states, and the task force recommended that the State Bar commit to this effort by appointing a standing committee that can keep the issue front and center.

    On that cue, State Bar President Patrick J. Fiedler is in the process of creating a Challenges Facing New Lawyer Committee, chaired by District 9 Gov. David Jones.

    Coley hopes the committee can push some of the recommendations identified in the task force’s report, and maintain ongoing efforts to consider larger, systemic changes.

    One recommendation is a State Bar-sponsored law firm providing short-term apprenticeship work for recent graduates with supervision, perhaps providing legal assistance to the poor or underserved. Other large-scale initiatives include:

    • a “legal residency” program that would give lawyers on-the-job training;
    • a program to help lawyers obtain temporary and project work;
    • a court clerk program, funded by law schools, where law students work as clerks in the court system to provide assistance amidst shrinking budgets;
    • a small business incubator to help potential solo practitioners; and
    • a program to help lawyers find work in rural areas.

    These large-scale initiatives, the task force notes, would require collaboration between the State Bar, the law schools, the BBE, the Wisconsin Supreme Court, the ABA, and other entities. Fixing systemic problems in the legal profession could take years.

    “I think it’s going to take a range of solutions from a lot of different segments,” Coley said. “Hopefully the State Bar is in a position to drive that collaboration.”