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<p>I’m pretty confident the market will come back sooner or later. The problem I see is that associate salaries – even at BIGLAW – will probably continue to decrease relative to law school tuition. Especially if you take taxes into account. </p>
<p>When I went to law school in the mid-90s, starting salaries at BIGLAW were 85k; yearly tuition was about 20k; and smaller firms paid perhaps 50k. Today, starting salaries at BIGLAW are about 160k; yearly tuition is about 45k; and smaller firms still pay about 50k. So tuition has increased by 125% while BIGLAW salaries have increased by only 90%. When you take taxes into account, the situation is much worse, since the additional 75k you are making at BIGLAW will be taxed at some of the highest rates while there is no corresponding tax break for the extra tuition dollars you will pay.</p>
<p>But the real kicker is the fact that smaller law firm salaries have not increased at all. When I went to law school, if you didn’t get BIGLAW or if you washed out of BIGLAW, taking a 50k a year job was not a total disaster. Now, it’s a much bigger problem.</p>