I thought this deserved its own thread even though there is another one on a related subject. Obviously it is easy to fill an article with sob stories like the ones in here but the overall tone of the article rings true to me based on my conversations with law school students and hopefuls. Hopefully soon we won’t be talking about the CFA bubble - good thing it is still pretty cheap. 
From the higher education thread: http://www.analystforum.com/phorums/read.php?1,1219800 mar350 Wrote: ------------------------------------------------------- > get a law degree - they have this country by the > b@lls An interesting article on law degrees was just published today by the NYT. http://www.nytimes.com/2011/01/09/business/09law.html Excerpts: To judge from data that law schools collect, and which is published in the closely parsed U.S. News and World Report annual rankings, the prospects of young doctors of jurisprudence are downright rosy. In reality, and based on every other source of information, Mr. Wallerstein and a generation of J.D.’s face the grimmest job market in decades. Since 2008, some 15,000 attorney and legal-staff jobs at large firms have vanished, according to a Northwestern Law study. Associates have been laid off, partners nudged out the door and recruitment programs have been scaled back or eliminated. And with corporations scrutinizing their legal expenses as never before, more entry-level legal work is now outsourced to contract temporary employees, both in the United States and in countries like India. It’s common to hear lawyers fret about the sort of tectonic shift that crushed the domestic steel industry decades ago. Improbably enough, law schools have concluded that life for newly minted grads is getting sweeter, at least by one crucial measure. In 1997, when U.S. News first published a statistic called “graduates known to be employed nine months after graduation,” law schools reported an average employment rate of 84 percent. In the most recent U.S. News rankings, 93 percent of grads were working — nearly a 10-point jump. In the Wonderland of these statistics, a remarkable number of law school grads are not just busy — they are raking it in. Many schools, even those that have failed to break into the U.S. News top 40, state that the median starting salary of graduates in the private sector is $160,000. That seems highly unlikely, given that Harvard and Yale, at the top of the pile, list the exact same figure. How do law schools depict a feast amid so much famine? 'Enron-type accounting standards have become the norm, says William Henderson of Indiana University, one of many exasperated law professors who are asking the American Bar Association to overhaul the way law schools assess themselves. ‘Every time I look at this data, I feel dirty.’ It is an open secret, Professor Henderson and others say, that schools finesse survey information in dozens of ways. And the survey’s guidelines, which are established not by U.S. News but by the American Bar Association, in conjunction with an organization called the National Association for Law Placement, all but invite trimming. A law grad, for instance, counts as “employed after nine months” even if he or she has a job that doesn’t require a law degree. Waiting tables at Applebee’s? You’re employed. Stocking aisles at Home Depot? You’re working, too. Job openings for lawyers have plunged, but law schools are not dialing back enrollment. About 43,000 J.D.’s were handed out in 2009, 11 percent more than a decade earlier, and the number of law schools keeps rising — nine new ones in the last 10 years, and five more seeking approval to open in the future. Apparently, there is no shortage of 22-year-olds who think that law school is the perfect place to wait out a lousy economy and the gasoline that fuels this system — federally backed student loans — is still widely available. But the legal market has always been obsessed with academic credentials, and today, few students except those with strong grade-point averages at top national and regional schools can expect a come-hither from a deep-pocketed firm. The surveys themselves have a built-in bias. As many deans acknowledge, the results are skewed because graduates with high-paying jobs are more likely to respond than people earning $9 an hour at Radio Shack. (Those who don’t respond are basically invisible, aside from reducing the overall response rate of the survey.) Certain definitions in the surveys seem open to abuse. A person is employed after nine months, for instance, if he or she is working on Feb. 15. This is the most competitive category — it counts for about one-seventh of the U.S. News ranking — and in the upper echelons, it’s not unusual to see claims of 99 percent and, in a handful of cases, 100 percent employment rates at nine months. A number of law schools hire their own graduates, some in hourly temp jobs that, as it turns out, coincide with the magical date. Last year, for instance, Georgetown Law sent an e-mail to alums who were “still seeking employment.” It announced three newly created jobs in admissions, paying $20 an hour. The jobs just happened to start on Feb. 1 and lasted six weeks. A spokeswoman for the school said that none of these grads were counted as “employed” as a result of these hourly jobs. In a lengthy exchange of e-mails and calls, several different explanations were offered, the oddest of which came from Gihan Fernando, the assistant dean of career services. He said in an interview that Georgetown Law had “lost track” of two of the three alums, even though they were working at the very institution that was looking for them. Based on the seething and regret you hear from some law school grads, more than a few wish that someone had been patronizing enough to say, “Oh no you don’t.” But it’s often hard to convince students about the potential downside of law school, says Kimber A. Russell, a 37-year-old graduate of DePaul, who writes the Shilling Me Softly blog. “This idea of exceptionalism — I don’t know if it’s a thing with millennials, or what,” she says, referring to the generation now in its 20s. “Even if you tell them the bottom has fallen out of the legal market, they’re all convinced that none of the bad stuff will happen to them. It’s a serious, life-altering decision, going to law school, and you’re dealing with a lot of naïve students who have never had jobs, never paid real bills.” This gets to what might be the ultimate ugly truth about law school: plenty of those who borrow, study and glad-hand their way into the gated community of Big Law are miserable soon after they move in. The billable-hour business model pins them to their desks and devours their free time. Hence the cliché: law school is a pie-eating contest where the first prize is more pie. Law school defenders note that huge swaths of the country lack adequate and affordable access to lawyers, which suggests that the issue here isn’t oversupply so much as maldistribution. But when the numbers are crunched, studies find that most law students need to earn around $65,000 a year to get the upper hand on their debt. That kind of money is hard to earn hanging a shingle in rural Ohio or in public defenders’ offices, the budgets of which are often being cut. As elusive, and inhospitable, as jobs in Big Law may be, they are one of the few ways for new grads to keep out of delinquency. The mismatch of student expectations and likely postgraduate outcomes is starting to yield some embarrassing headlines. In October, a student at Boston College Law School made news by posting online an open letter to the dean, offering to leave the school if he could get his tuition money back. “With fatherhood impending,” wrote the student, whose name was redacted, “I go to bed every night terrified of the thought of trying to provide for my child AND paying off my J.D., and resentful at the thought that I was convinced to go to law school by empty promises of a fulfilling and remunerative career.”
$3000 in debt for the CFA pales in comparison to the $100k+ debt loads people take on to go to law skool also, its that persons own fault for going to bottom tier 2 or 3 school and expecting to come out making $100k, when there are hundreds of other students at better schools ahead of them a degree or cerfitication is not an entitlement to a job, which is the mistake many make.
law schools is like an MBA in that if you don’t go to a good name school, it’s just a waste of money. For some people who think, “well I can’t get a job anyway, so I may as well go for a higher degree”, a higher degree will screw them out a chance to get the good entry positions, since now they’re “overqualified”
I think we are seeing the beginning of a CFA bubble (especially in Asia). But yes, at least no one spent more than a few grand. I’m still glad I didn’t listen to my parents and get a JD. Phew!
Dwight Wrote: ------------------------------------------------------- > mar350 Wrote: > -------------------------------------------------- > ----- > > get a law degree - they have this country by > the > > b@lls hahaha - glad you liked that. what i was referring to is how lawyers have an effect on almost every aspect of daily life (healthcare, taxation, school lunch menus, etc.). we had some previous threads about MBA vs JD here: http://www.analystforum.com/phorums/read.php?1,1204990,page=1 law starts about mid-way on page 2 also, referring to the NYT article - maybe there are more reasons why this guy can’t get a job: "Today, his best guess is that he should be sending $2,000 to $3,000 a month in total, to lenders that include Wells Fargo, Citibank and Sallie Mae. “There are a bunch of others,” he says. “I’m not really good at keeping records.” "
so many great quotes here: “It’s a prestige thing,” he says. “I’m an attorney. All of my friends see me as a person they look up to. They understand I’m in a lot of debt, but I’ve done something they feel they could never do and the respect and admiration is important.” “Bank bailouts, company bailouts — I don’t know, we’re the generation of bailouts,” he says in a hallway during a break from his Peak Discovery job. “And like, this debt of mine is just sort of, it’s a little illusory. I feel like at some point, I’ll negotiate it away, or they won’t collect it.” and the kicker… He gives a slight shrug and a smile as he heads back to work. “It could be worse,” he says. “It’s not like they can put me jail.”
CFA will always have a positive NPV. As stated, it’s a $3 grand investment for starters. Secondly, while more people are slipping past the test, the 4 years experience further limits supply and at least ensures that charter holders are knowledgeable industry professionals. At the minimum, four years of experience will always hold some value.
Black Swan Wrote: ------------------------------------------------------- > CFA will always have a positive NPV. As stated, > it’s a $3 grand investment for starters. > Secondly, while more people are slipping past the > test, the 4 years experience further limits supply > and at least ensures that charter holders are > knowledgeable industry professionals. At the > minimum, four years of experience will always hold > some value. not when people with financial reporting and analysis experience get their work approved.
ChickenTikka Wrote: ------------------------------------------------------- > I think we are seeing the beginning of a CFA > bubble (especially in Asia). Keep in mind that an increase in enrollment doesn’t mean an increase in pass rates.
Black Swan Wrote: ------------------------------------------------------- > CFA will always have a positive NPV. As stated, > it’s a $3 grand investment for starters. > Secondly, while more people are slipping past the > test, the 4 years experience further limits supply > and at least ensures that charter holders are > knowledgeable industry professionals. At the > minimum, four years of experience will always hold > some value. the best part about the Charter IMO is that you need those 4 years of approved experience to get it. that definately helps CFA keeps its cache
But 4 years of experience is a prerequisite to getting the charter. It does not add value to the charter itself.
My CFA Charter is far larger than either my BA or my MBA. Therefore I assume it has more value.
Based in Hong Kong and know a clerk that is a CFA level 3 candidate. I cannot agree more with ChickenTikka. During a recent wedding in Hong Kong, I was sat with 11 chinese people all age under 35. Half of which have completed all 3 levels and the other half are either level 2 or level 3 candidates. The bubble is there in asia and you’ll have to see it to believe it. I’ve got a load of name cards with at least 2 of these 4 (CPA, CFA, CAIA, FRM).
Remember with the CFA that every year, more new MBAs are minted in the United States alone than the entire number of living charterholders. Eventually that may no longer be the case, but finding a CFA charterholder is still way way way rarer than the MBA (although MBA is also a more general degree and applicable to a wider variety of functions).
Totally agree that there is a CFA bubble in Asia. The enrollment numbers are crazy in places like India. Some of my cousins are sitting/have sat for Level I and they aren’t even looking for jobs yet. They just want to get the exams out of the way. I,m not even sure if the charter is as highly regarded in these places as it is in the U.S and Canada.
There was some Australian guy who posted here once. He asked if he should quit his job to focus on the CFA.
bchadwick Wrote: ------------------------------------------------------- > Remember with the CFA that every year, more new > MBAs are minted in the United States alone than > the entire number of living charterholders. > Eventually that may no longer be the case, but > finding a CFA charterholder is still way way way > rarer than the MBA (although MBA is also a more > general degree and applicable to a wider variety > of functions). ^ This is pretty encouraging at least. I think it will still be the case for some time given the level of commitment required. It always astonishes me how often people sign up for difficult tasks and then drop them. In my opinion for the CFA to lose a ton of value either the curriculum would need to become obsolete, passing much easier, or human nature would need to change. That said, the “arms race” metaphor someone made is compelling. It is only helpful to the extent that you can get there before everyone else does and leverage it for opportunity.
Yeah, I don’t think the CFA is the best comparison to an MBA or law degree in terms of NPV calculation. The CFA is very cheap relative to professional degrees. If we’re discussing the NPV of a CFA, we might as well discuss the NPV of other relatively inexpensive certifications. For instance, maybe there is a driving license bubble. Many people get driving licenses but do not drive.
There is definitely no CFA bubble (if that was even possible). The charter is not like some tangible asset that has a fluctuating value. It’s so cheap to attain that even if it’s value in the workplace dimishes, it still wouldn’t mean much. Also as Bchad said, there really aren’t that many charterholders running around. Look how many CPAs there are…people question your smarts if you’re in accounting without the CPA. Half the prople in finance don’t even know what CFA is, let alone plan on taking it.
Analyze_This Wrote: ------------------------------------------------------- > There is definitely no CFA bubble (if that was > even possible). The charter is not like some > tangible asset that has a fluctuating value. It’s > so cheap to attain that even if it’s value in the > workplace dimishes, it still wouldn’t mean much. > Also as Bchad said, there really aren’t that many > charterholders running around. Look how many CPAs > there are…people question your smarts if you’re > in accounting without the CPA. Half the prople in > finance don’t even know what CFA is, let alone > plan on taking it. But more organizations need CPA’s than CFAs. CFA caters to a niche industry which is in the dumps.