Quitting job and starting law school in the Fall - help!

[m458]

Hi, everyone,

Been reading this forum for almost 2 years now and I owe you all many thanks for your insight and advice.

Emergency Funds: Yes
Debt: None
Tax Filing Status: Single
Tax Rate: 25% Federal right now, 5% State (Mid-40k salary)
State: Illinois
Age:24
Desired Asset Allocation: 70% Stocks, 30% Bonds

Assets:

$31k in Cash @ American Express earning 0.9% or whatever it is these days - This will be used to pay for the 1st year of law school
$19k in ROTH IRA - Invested in Vanguard LifeStrategy Moderate Growth Fund
$17k in 401k from work - Invested in Schwab 1000 Index Fund
Total Assets - $67k

Contributions:

Have contributed $2,000 of the $5,500 possible to the ROTH as of right now - not sure if I will contribute the remaining $3.5k
Contribute 5% of every paycheck to 401k (had contributed more before, but wanted my money to be a bit more liquid b/c of my law school plans and thus reduced the contribution to just enough to get the full employee match)

Key Points

1. I will be quitting my job soon--within the next few weeks--and taking a few months off before starting law school in the Fall.
2. I'm getting an almost full-ride to a T-14 law school and have calculated my budget for the next three years:
-Will need approximately $30k a year ($90k total over the three years) for the bit of tuition my scholarship won't cover, health insurance, and cost of living
-Using all the cash in the AmEx account to pay for my entire first year of school/cost of living
-For my 2nd year of school, I will be borrowing from my family
-For 3rd year of school, I will hopefully use what I earn from both summers (summer between 1st and 2nd year I don't anticipate earning much, but if all goes as planned, I should earn about $20-$25k during the summer between my 2nd and 3rd year)
-Cannot take out government loans due to technically being considered an International student--this is why I have to fund all this through my savings, earnings, and family help
-Hoping to leave my ROTH IRA and 401k untouched throughout law school, but if need be, I know I can take out $17k from the ROTH IRA
-Though I am hoping to borrow only $30k from family to pay for school, they are willing to lend me up to $50k

Questions

1. Once I quit, what should I do with the 401k? I will most likely have no income for all of 2014, so I believe it would make sense to convert it to a ROTH IRA next year, but I don't know how the process works and what I need to do in the meantime to just roll-over to a Traditional IRA. What steps do I need to take to get my money from my employer's 401k over to Vanguard and minimize any tax implications?
2. Keeping in mind that I need to have access to cash, should I still take some of my money and fill up the ROTH IRA to the limit for this year? I know I can take contributions out later, but psychologically I've always had the mindset of "once it goes into a retirement account, it's not coming out." On the other hand, seems to make more sense to put it in the ROTH than to keep it in AmEx where it's making almost no interest. If for some reason the funds lost value, wouldn't be the end of the world.
3. What should my asset allocation be while I'm in law school? I'm thinking I feel comfortable with 70/30 split, and once I can have it all in Vanguard that'll probably be easier to manage.
4. Anything to keep in mind when I give notice and eventually quit? Should I look-out for any forms they'll want me to sign or be wary of anything?

Thanks in advance for all your help!

[2stepsbehind]

Before I get to your questions:
-Are you sure you want to go to law school? The legal market is pretty saturated right now and the legal profession is becoming an even less glamorous.
- Congratulations on the scholarship, but I wouldn't describe needing to shell out $30k per year as an "almost full-ride." That seems closer to a half-ride

1. You could leave the 401k where it is if you are happy with Schwab--you could do a lot worse than Schwab 1000 Index Fund--low fees and fairly efficient. Alternatively, you could roll it over to an IRA and then convert it to a Roth IRA while you are in law school to take advantage of your low tax bracket.
2. I would probably contribute the full 5.5k to the Roth and, if needed, cut back on my living expenses. Tax advantaged space is precious.
3. Thats certainly reasonable. If you wanted to simplify you could pick the target fund that most closely matches your desired allocation and revisit later when you have a bit more saved.
4. Any reason you want to quit so soon? Law school doesn't begin til late August/September...
Hard to give advice in a vacuum--is this the type of place where turnover is frequent; do you have a good rapport with your boss/colleagues; are you easily transitioned off certain projects etc?
Depending on the organization/culture, they could immediately ask you to clear your desk, however, I would expect that they'd ask you to help wind down any projects you are working on and recruit and/or train someone to take over. I would expect to do at least 2 full weeks of work after giving notice (i.e. don't hand in your resignation and then leave for a 1.5 week vacation). If you are expecting a bonus, I'd try to hold off on announcing your departure until the money is at hand. They may ask you to sign a release/waive any future claims. A well-run organization should have an exit interview where they ask you about your experiences/get your feedback about where the org is headed.

[norookie]

#4) Why take time off work before going to LSchool, break a hip? Need a vacation? Sorry, must be my 3am to 6pm decade plus when the cash was waiting to be mined and counted as income after my dropping out of LSchool. Its not the yellow brick road. JMO Good luck!

[DualIncomeNoDebt]

My suggestion: don't give notice. Don't quit. You're doing well already, you can have financial independence.

Take it from someone who's in the law game (and doing well): you are likely to regret it. Counting the days until I am out for good. A permanent vacation from law practice cannot come soon enough. Truth.

Or, take a job at a law firm for six months. Do it before you plunk down a boatload of money and three years of your life, and possibly decades more, with this "profession." Thank me later.

[MBMiner]

Law School? I wouldn't do it again on a bet. It's the worst time in my memory for lawyers since I went to law school 50 years ago.
Bruce

[PR101]

As a former lawyer and a graduate of a top 10 law school, I also would strongly recommend that you avoid law school. The profession will be a soul-crushing waste of your life. After 13 years of toiling at biglaw, I was lucky to get out and be able to do what I wanted to with my life before it was too late. You have done a great job of saving money at a young age - why throw most of it away to go back to school?

A month before I went to law school I was golfing in Myrtle Beach. My buddy and I were paired up with two lawyers from Pittsburgh (father and son). When my friend informed the two lawyers that I was starting law school in a few weeks, the younger lawyer looked off into the distance and said "If there was anything I could say that would change your mind, I would."

It really is that bad.

[m458]

Thanks for the comments.

Yes, I'm sure I want to go. I've thought it out and specifically picked this school to minimize debt. I've also been exposed to the profession and am fully aware of the type of work that it can entail (doc review/due diligence/etc.) and okay with that as well. Have also looked at the true employment stats for the school (not the school-published ones, but LawSchoolTransparency, NLJ250, and ABA report stats) and feel good about the value proposition with it.

Full-ride might've been the wrong phrase; the scholarship covers almost 100% of tuition ($50k a year). The $30k is really mostly living costs...without naming the specific school, it's definitely in a large city with a high cost of living. The tuition I'll be paying is no more than $3k the first year, probably $6-8k by the third year. Books, room/board, health insurance, eating out/alcohol, having a dog...that's what pushes it all up to $30k. I'm sure I can find a cheaper apartment too and bump that down to $25k a year if necessary or less if I need to be frugal.

Is it easy to convert from a regular IRA over to a Roth IRA?

Good point on the Roth...I definitely think I'll contribute the rest to it.

In terms of why I want to quit so soon, I've been really working steadily since the summer between my Junior and Senior years of high school. I know that once I start law school and (hopefully) work in the legal field after graduation, it's very likely I won't get more than a week or two off at a time again until I retire. I'd like to visit my family back where I'm originally from and really spend some time with my Grandma. Also want to just have time off to then visit friends and recharge my batteries before my first year of school starts. So basically, to answer norookie, mainly just wanting a vacation 4 months might be too much time off though, so you certainly all do raise good points. Perhaps I won't quit quite so soon and wait it out a bit more. I have so-so rapport with my boss at this point, which is a big reason why I wanted to quit. I'll certainly work a full 2 weeks after giving notice, possibly more if they ask me to. Not expecting a bonus in the next few months, so no issue there.

Thanks for the input too, DualIncome. If you don't mind me asking, what kind of firm/job are you in right now? Area of practice? Still at a big law firm or did you transition out to smaller firm or in-house? I've definitely talked to friends who are current 1st/2nd year associates at law firms and others who are in law school right now and have done summer stints in big law. Trying to get as many different opinions as I can before starting. I certainly would have much more hesitation in going if I were paying full-sticker price.

I also feel like in my current career I don't have very much opportunity for advancement, so that plays a big factor as well.

[m458]

As a former lawyer and a graduate of a top 10 law school, I also would strongly recommend that you avoid law school. The profession will be a soul-crushing waste of your life. After 13 years of toiling at biglaw, I was lucky to get out and be able to do what I wanted to with my life before it was too late. You have done a great job of saving money at a young age - why throw most of it away to go back to school?

A month before I went to law school I was golfing in Myrtle Beach. My buddy and I were paired up with two lawyers from Pittsburgh (father and son). When my friend informed the two lawyers that I was starting law school in a few weeks, the younger lawyer looked off into the distance and said "If there was anything I could say that would convince you to not become a lawyer, I would."

It really is that bad.

Do you think it's any better if you don't plan on being in big law that long? I know certainly a lot of the interesting PI and government work will look favorably upon Big Law experience and I'd certainly want to work in it at least 2-3 years. I feel that a lot of graduates are miserable because they have to stick with Big Law for 5 or more years to pay off their debt--wouldn't not having the debt and being able to have more flexibility in the types of jobs in the legal field I can take help me enjoy the profession more?

Legitimately asking...I appreciate all your guys' input.

[BerkeleyChris]

I would personally not feel comfortable with the spending plan because you use up most of your cash in year 1, and if your plans to fund year 2 or 3 don't work out for some reason, you don't really have the backup of student loans to keep you on track (not that i like the idea of loans anyway!).

Given your stated budget constraints, I would focus some more energy now thinking about cash flow (when should you really quit your job; how to get your income up between now and August--why not ask for a raise before you give notice, if they gave you one, would it change your mind on timing?; how to live more frugally now and as a student; any additional scholarships for which you can apply; can you defer for a year and save for the next 18 months without losing the scholarship?).

Your budget for the next three years seems more consequential to me than tax strategy, but of course you can address both issues.

Since this is a financial forum, I wanted to address your financial situation first. But I really can't help but try to add my 2 cents about the career decision and how you make the exit. A mentor told me a few years ago that happy people in life tend to make decisions that open more opportunities than are closed by their decisions. In doing so, happy people create and preserve more good options in life than they can possibly pursue, and can more easily make changes when necessary. In that spirit, I'd make sure to exit the company on a 100% positive note, sprint across the finish line helping other people and communicate only positive things about the experience. Rephrasing what some of the other posters have said, I would make sure that law school really opens the doors you think it will. Clearly you have thought a lot about it, but there is time to keep thinking about it and to find ways to test and validate what you think is true about the profession. Finally, if your goal with all this is to go into public interest law, I'd make sure to be extremely frugal so that you don't bind yourself to earning a private-sector salary after law school.

[Random Poster]

It might be helpful to expound on why the practice of law is so soul-crushing for many (most?) lawyers.

I'll start: incredibly demanding clients who often fail to provide you with proper and complete information that is needed to do your job; extremely limited ability to control your own schedule; antagonistic culture where you are expected to fight someone else's battle for them; unrealistic deadliness; nonexistent gratitude from clients; and semi-cannibalistic law firms.

3 questions for you:

How many happy lawyers do you know?

What percentage of lawyers remain in the profession 10 years after they graduate from law school?

Do you think that you can beat the odds?

[MoonOrb]

If you really are keen to practice law, then by all means, go to law school. The people I know who were unhappy in law school or are unhappy lawyers are largely made up of people who went because they had no better plan. The people who were the most interested in actually practicing law were both the most happy during law school and the most happy once they got out of law school.

Also, take the 4 month vacation and spend time with your friends and your grandmother. Then, when you go to law school, you've got to really grind. I would not count on making money during your summers. It might happen for you, it might not. My firm is planning on not hiring summer associates.

I'd put the money into the Roth and take advantage of that tax advantaged space while you can. You can always pull it out.

I'd also do what I could to cut my living expenses down to the bone while I was in law school. A smaller law school debt burden gives you more options when you get out.

One last thing to think about is that you should plan ahead to think about where you want to live when you get out of law school. The practice of law, by and large, is local and it is difficult to move once you start somewhere (not only because of bar admissions but because of networking, developing a base of potential clients, and becoming familiar with the procedural rules and cultural norms of your particular jurisdiction). Many people who do not think much about this wind up practicing in the city where they go to law school. Going to a T-14 school helps, so if you don't want to live in DC or NY or Chicago you probably don't have to, but you had better put some thought into it before you find yourself taking summer jobs and building connections in the city where you go to law school, and find yourself without any connections and viable options in places where you might prefer to live instead. It's also generally true that the practice of BigLaw is more of a grind in bigger cities than it is in more moderately sized cities. I make less than my East Coast counterparts, but I like my job. I worked until 630 tonight and was one of the last people to leave the office.

[LadyGeek]

The question should instead be: For how long have you wanted to be a lawyer and why? If this is something you've always wanted to do, that's one thing. If you think it might be a change of pace, that's an entirely different situation - stop and think.

Don't let your lifetime of savings disappear if you haven't tested the waters yet. Remember that you can fulfil your passion through volunteering (or as a hobby). Are there any legal services that could use volunteers? Offer yourself as a volunteer, then work alongside someone as a trainee. You can keep your "day job" and get satisfaction of doing something worthwhile.

As for leaving an employer, consider that you may have signed a Non-Disclosure Agreement or Non-Compete Agreement when you started.

To transfer your employer's 401(k) to Vanguard, just give them a call. They'll tell you exactly what to do.

[2stepsbehind]

So far the OP really hasn't explained why he wants to go to law school. Even with the reduced expenditure, I'm not sure the "value proposition" is really there. As for transitioning out of biglaw, good luck getting those jobs. Competition is fierce right now.

Edit: Didn't see LadyGreek's reply before mine, but agree with her post wholeheartedly.

[2stepsbehind]

If you really are keen to practice law, then by all means, go to law school. The people I know who were unhappy in law school or are unhappy lawyers are largely made up of people who went because they had no better plan. The people who were the most interested in actually practicing law were both the most happy during law school and the most happy once they got out of law school.

For what it is worth that is not my experience. My experience is that a lot of people came into law school wanting to practice law, but also wanting their practice to mean something/i.e. change the world (international human rights! civil liberties! environmental law!) and somehow three + years were consoling themselves with the fact that firm X has a pro bono program. The fact is there are only so many public interest fellowships/jobs and so much debt. Very hard to stay true to the motivations that brought many to law school in the first place.

[FedGuy]

I know certainly a lot of the interesting PI and government work will look favorably upon Big Law experience

FYI, government jobs are very difficult to get these days for political reasons we can't really discuss here. (Hint: budget stuff)

[DualIncomeNoDebt]

Thanks for the input too, DualIncome. If you don't mind me asking, what kind of firm/job are you in right now? Area of practice? Still at a big law firm or did you transition out to smaller firm or in-house? I've definitely talked to friends who are current 1st/2nd year associates at law firms and others who are in law school right now and have done summer stints in big law.

Did biglaw while in law school. A nicely paid summer internship was all I needed to see to know I would never, ever be a biglaw lawyer. Mind you, this was around fifteen years ago, when biglaw jobs were more plentiful, [inappropriate language removed by admin LadyGeek]. I worked shoulder-to-shoulder with associates who flat-out told me they were there for at most a few years to pay off their school loans and get the heck out. It was mind-numbing work then -- spending time on stuff you don't care about. Reviewing [stuff] that is so boring you could hang yourself. Think you'll have some exciting job once you hit the street with your J.D. and bar card? Guess again -- you're getting paid to deal with the most boring, mind-numbing, excruciating garbage that no one else wants to deal with. That's how the big bucks get made. When I was at biglaw it was reviewing bond and note offerings and securitizations, sometimes thousands of pages long, the same rote garbage over, and over, and over. P-1 notes and P-2 notes and P-3 notes and P-4 notes and waterfalls and shortfalls and defaults and recourse and non-recourse and securitizations and debt ratios and covenants on and on and on and on, page after page after page. That's corporate law in a nutshell. Thousands of pages a day of [inappropriate language removed by admin LadyGeek].. Your incomprehensible credit card statement x1000. Horrendous, and that's when it was still good.

Now, it's much worse. You'll be fighting tooth-and-nail for those few jobs. Hours requirements are higher, partnership track is a laugh. Highly likely you'll be on a "non-equity" track. Translation: you do all the work, partners reap all the money. And for all this excitement, your law school costs will likely be triple, if not quadruple, what the partner above you paid.

Currently, I run my own firm, have several partners, who I like. It's a great way to practice; the only way I could stand it, frankly. We go after Wall Street banks and companies for defrauding investors, and also do some personal-injury type cases. Nothing else, all plaintiff work. It can be rewarding, and the only reason I've been able to keep at it this long is we nearly always are on the side of justice, representing David against some pretty scummy Goliaths. And we are successful. But it takes lots of experience to be successful, eight years minimum to get to the point where you could come in and be effective in one of these cases.

But even with our own firm, picking the cases and hours we want, having more control over our destiny than you will have, and even with the rewarding payoff, it still majorly [stinks] most of the time. Really [stinks] . I could spend every waking minute fighting and arguing with lawyers representing the other side. Think you'll enjoy arguing and fighting over documents and procedures and money for the next decade? Sitting on the phone in meetings and conference calls while idiots drone on about why they are right, then you chime in about why you are right, and on and on it goes? Believe me, after you've spent around five years fighting every single working day of your professional life, you'll be wondering, "why the hell did I do this"?

It gets better. Your schedule is not your own. It will be run by the "calendar." Everything in your professional life will be run by the "calendar," and you get to set none of it. Instead court rules, court orders, due dates, litigation rules, response dates, court appearances, client availability, mediator availability, opposing counsel schedules, this is what will dictate your professional life. If you're in litigation, judges will set out dates that suit them most -- you'll have to do all the work, around everyone else's schedule, all of the time, and 99% of the time you cannot miss a deadline. These deadlines are hard and fast, miss one and you could jeopardize your position. Blow a calendar date, you could lose an entire case before you even file it if you miss a statute of limitations or repose.

There's so much more that [is bad]. Keeping time sheets, soul-draining waste, but necessary. You can't just "do" something. No, you have to describe it, record it, memorialize it in writing. Think about having to write down what you do in precise billing increments for the next ten or twenty years. You'll be hating life, believe me. How about doing something as simple as sending friendly or opposing counsel some documents or exhibits? Nope, you cannot just "send them along." Are the documents confidential? Does a confidentiality order apply? How about privileged? Do the materials contain anything that is privileged? Do you have to redact something? Enjoy answering that question repeatedly for the next two decades. Have an agreement with the opposition? Nope, not until you send a "confirming letter" writing down every thing you agreed on, in case the other side doesn't hold up their end -- and that will happen frequently. So then you get to prepare endless motions for discovery and to compel, to force the other side to do what should be routine, then spend even more time perfecting the papers, filing the papers where ridiculous rules (right down to the font size and line spacing) change from court to court, then getting ready for the hearings, trudging to court, getting your orders ready, all of this over and over and over on the most mundane and routine things that you will come to hate, and hate passionately.

I could go on for hours. No exaggeration to say I'm doing as good, if not better, than most biglaw lawyers, and I can sleep well knowing we are doing well by doing good. This [bad situation] gets much worse if you are representing corporates, are doing frivolous shakedown patent work and patent trolling, are in insurance defense, or join some other outfit where your job is to [cheat] honest people out of money, and [cheating] people is where the big bucks get made. Family law? Good luck with that, as you will see the worst in people day-in and day-out. These types of lawyers, they hate their lives. Hate. I know this because they have told me so, on many occasions. I've been up against the most storied firms across the country. Turnover is extremely high, especially at the associate level. I couldn't begin to count the number of younger associates I've seen disappear from firms and cases that have been on the other side -- you won't hear about it because firms keep this under wraps. Not good for their image. Only the equity partners and chairs seem to hang on. So think about that -- I've seen many young associates depart (or get the boot) before even a single multiyear litigation had concluded.

[Rude and inappropriate language removed by admin LadyGeek]

[bertie wooster]

Wow ... just wow.

And I thought the threads bagging on a career as an MD were bad.

[lawman3966]

Perhaps I've been lucky, as my experience has been better than what some above have described.

I did something prior to attending law school that I will recommend for you here - namely to start with the end in mind (one of Seven Habits of Highly Effective People, which I have still not read).

I was an engineer with an interest in Patent law. Before sending out my first law school application, I contacted about half a dozen patent agents and attorneys and solicited input from them about the profession, their career satisfaction, their financial satisfaction, and what their suggestions were regarding law school and career direction. At that time (late 1980s), everything was positive. The answers from practitioners might be quite different now. It's hard for me to say because I have not had to look for a job in some time.

However, one general principle still applies. Specifically, flexibility and "opening many avenues" notwithstanding, you should have some basis for believing that your career strategy makes sense, and get some professional feedback on your plan before you apply to or attend law school. It's great to have many avenues, but it's even better if at least one of them leads somewhere worthwhile.

I feel I can productively add one anecdote relating to my present employment. I have worked for a partner (I'm not a partner myself) for about eight years. I have moved with him through several law firms during that period, the latest move being from a mid-size law firm that blew up on 2012, to a small boutique firm in my field. The firm we joined is made up of top notch patent attorneys, many having had prominent careers in technology prior to becoming attorneys. Nevertheless, prior to merging with my eight-year partner buddy, their firm was in dire straits, and they were considering pursuing alternative careers as recently as 2012. I repeat here that these folks are at the top of their game. Less skilled attorneys in this field are suffering income reduction and, in many cases, job loss at middle age, under circumstances in which finding new employment is becoming difficult.

People used to start their careers at the U.S. Patent office as patent examiners and then head into private practice to increase their incomes. Now, lawyers (including no small number of former law firm partners) are heading to the patent office to accept jobs at 1/2 to 1/3 of their former salaries just to have a job, a roof, and a health care plan.

If you are intent on proceeding with law school, it is well worth getting the type of information I refer to above before spending the time and money getting a law degree.

[Average Investor]

Law business is tough. I did my 2 years as an associate and got out before it got me out. Barely survived!

[john94549]

I can't recall the date I passed the bar. I will never forget the date I retired: November 9, 2006.

FWIW, I did it all. Big law, mid-size, associate, shareholder (aka partner), solo (at the end).

Best advice I can give: ditch BigLaw aspirations initially. Get involved politically and snag a job interning in the DA/PD office. Hope to get hired by either on graduation/passing bar, as it will be your only real chance to gain marketable skills, i.e., trial work. Kids two years out of law school are expected to try misdemeanors, but combat is better than carrying someone's briefcase. Four years out, you will be marketable, unlike your peers in BigLaw.

As I recall, BigLaw cuts come initially at two and four (i.e., half the associates are eliminated at the end of their second year, and another half at the end of four years). A class of 20 would have five left, of which two would be partner-track. Those two would generally be one corporate, one litigation. Does it still work that way?

[Valuethinker]

Law is the OP's goal for a long time.

Key things to remember:

- law school is hard, the practice of life as a lawyer is harder (the happiest lawyers I know, oddly enough, are tax lawyers. There's always lots of work, it is intellectually stimulating at times (quite academic in a way), you don't spend a lot of time marketing for clients (they come to you, and any work within the corporate side of the firm will have a tax component), you can do it when you are older (the main issue is the sheer pressure of staying on top of a constantly changing field)).

- check and recheck at various key points your commitment to working in the private practice of law. There are lots of other things lawyers can do-- government or law enforcement, working for companies etc.

Given the above 2 realities, minimizing debt is a key goal, because if you have lots of law school debt, then you are tied to big law- -and that's aiming both at the worst jobs, and the ones perhaps hardest to get.

[loco00]

To answer OP questions, here's what I did during law school after I left my job. I made the mistake of cashing out 401k (to pay for part of law school); I paid stiff penalties, paid taxes and I regret it to this day. I'm sure you won't but my suggestion is consolidate your IRA/401(k) into one account, pick a target retirement date vanguard fund and leave it alone. It's the last thing you want on your mind as you're going through law school. Just leave it alone for 3 years. You won't have the time or the energy to think about your portfolio...

For me, I took the unconventional route out of law school. After 2L, I knew I didn't want to be in a firm. I took a job with the federal government through a program called Presidential Management Fellowship. Because of a loophole which has been closed, I was able to defer my student loan payments for two years. I'm in field of contract management, something that law school (except for maybe Georgetown or DC based law schools) never teaches. It's a niche field where attorney are just the advisors and the actual work and authority are done by and lies with contracting officers. I worked as a contracting officer for Department of Air Force for five years and I am now overseas supporting the military.

Two things to remember and something that law school isn't really good at teaching/informing you. Know your loans. Keep tabs on it. Know what you're signing up for, for how much interest and for how long. Most of my friends who started out with firms are no longer working for firms. If statistics hold you, you won't be either...

[PR101]

Do you think it's any better if you don't plan on being in big law that long? I know certainly a lot of the interesting PI and government work will look favorably upon Big Law experience and I'd certainly want to work in it at least 2-3 years. I feel that a lot of graduates are miserable because they have to stick with Big Law for 5 or more years to pay off their debt--wouldn't not having the debt and being able to have more flexibility in the types of jobs in the legal field I can take help me enjoy the profession more?

First of all, you have to get a job in biglaw. A lot of students at top 14 law schools who assume they will go work in biglaw "for a few years" are left standing when the music stops.

Second, if I left law school without any debt I doubt that I would have returned to biglaw after my 2L summer or, if I did return, I doubt that I would have stayed for 2-3 months never mind 2-3 years. The debt is what keeps you from telling a partner or client to stuff it when they inform you at 5:30 pm, Friday, July 3rd, that you need to work all weekend on a perfectly meaningless assignment of sheer drudgery.

[matjen]

First of all, you have to get a job in biglaw. A lot of students at top 14 law schools who assume they will go work in biglaw "for a few years" are left standing when the music stops..

The above is IMPORTANT. Even with all the negativity in the prior posts, MOST kind of assume you will even get a position in a BigLaw (=higher paying) Firm. The odds of this are honestly about as good as beating a diversified passive portfolio with active funds over a 10 year period. Single digits.

I got out in the early 90s and left the real practice of law in 2000. Have been in technology ever since but with a core specialty of servicing law firms. The technology along with the economy is really putting a crunch on the old business models for BigLaw. Ever since I got out I would tell people not to go to law school unless you were in a top 10 program (mine was top 20 at the time and top 25 now) OR your parents are paying. In Chicago, the fact that going to John Marshall costs in the same ballpark as U of Chicago or Northwestern is a complete and utter joke. Spend some time on the TaxProf Blog for more coverage about how this industry is changing.

Having said all of the above, if you really love it then you love it and need to go. Also, for the first time in decades the enrollment is falling. I still think there is a ways to go but better you are going now than 5 years ago.

http://taxprof.typepad.com/taxprof_blog/

http://balkin.blogspot.com/2013/03/the- ... -goes.html

[ResNullius]

Retired partner here from a large firm. Unless you plan on being in the top part of your class, you aren't likely to get a high paying job, regardless of law school. Personally, I would never advise someone I know to go to law school today. As for summer clerk jobs, they are fewer and further between than in past years, so you can't count on that either. This isn't to say that you won't have great success, only beware of what awaits you. I had a good career, but times have really changed in the practice of law, and not for the better. Anyway, good luck.

[PR101]

You also need to be prepared to deal with going to school and then working in environments where there is a heightened incidence of mental health issues.

http://www.psychologytoday.com/blog/therapy-matters/201105/the-depressed-lawyer

[TSR]

Yikes. This thread has gotten pretty anti-law. I too am somewhat anti-law, but I went to law school and am actually fairly happy about that. I did three years in biglaw and hated it, but now I work for the government and love it. (For the record, I felt like I won the lottery when I got my job, so I'm not suggesting that it's that easy.) I do agree with everyone that you want to scrutinize and cross-examine (law!) your motives for going to law school, but I think it's silly to assume that we're going to talk you out of it. That said, I'll offer a few financial points for you:

1. Although you are correct that you will not make money your first summer, don't assume that you will make money your second summer. There are fewer and fewer of those jobs being handed out, and if you are in a "T-14" school rather than a "T-5" school, you will still need to be in the top 30% of your class (at least) to get such a job. The odds are not exactly in your favor there. Remove this notion from your financial calculations, though it is still a good goal to shoot for.

2. Is your scholarship contingent on your performance in law school? In order to get people with good LSAT scores to come, many schools give out scholarships to, say, 50% of their incoming students. The catch? The scholarships are contingent on those students being in the top, say, 30% of the class. In other words, the schools are betting against the students. You NEED to win this bet, but you have no idea whether you will until you get your grades. Work really, really hard.

3. I agree with others here that you don't need a four-month vacation. I did a version of that and wish I hadn't.

4. Given all the above, the only thing that you control in this process (aside from how hard you work) is how much money you spend. Think about that -- think about the power you have. You can graduate with a lot of debt or very little debt. When you go to law school, don't get a roommate. Get THREE roommates. You'll do better to spend all your time in the library anyway. You've been working and making money, but hopefully you also learned how to eat ramen noodles and not go out on Friday nights and not try to impress people with money. Seriously, this is the most important thing you will do in law school.

5. Don't touch your retirement accounts. The only guarantee you have is that you will graduate with plenty of debt -- nothing guaranteed on the job front. You'll be happy to have something on the positive side of the ol' net-worth spreadsheet.

6. I think about my student loans every day. Literally every day, and I make plenty of money and am way, way ahead on paying them off. That's no good. Don't be like me.

Good luck, and sorry none of us has really answered your actual questions!

[Random Poster]

2. Is your scholarship contingent on your performance in law school? In order to get people with good LSAT scores to come, many schools give out scholarships to, say, 50% of their incoming students. The catch? The scholarships are contingent on those students being in the top, say, 30% of the class. In other words, the schools are betting against the students. You NEED to win this bet, but you have no idea whether you will until you get your grades. Work really, really hard.

OP, if TSR's comments apply to you, read this article from the New York Times on this practice:

http://www.nytimes.com/2011/05/01/busin ... d=all&_r=0

[boro]

Hi, read through the posts here, and I have seen similar comments from elsewhere. My question is whether you posters here would maintain similar sentiments if the law school in question is either Yale, Harvard or Columbia (full ride)? Like the OP, my D is also making the transition, from a well paid job (graduated almost two years ago from a LAC) to law school this fall.

Apology for the question in a financial blog. I am a recent lurker learning the Bogleheads way.

[TSR]

Hi, read through the posts here, and I have seen similar comments from elsewhere. My question is whether you posters here would maintain similar sentiments if the law school in question is either Yale, Harvard or Columbia (full ride)? Like the OP, my D is also making the transition, from a well paid job (graduated almost two years ago from a LAC) to law school this fall.

Apology for the question in a financial blog. I am a recent lurker learning the Bogleheads way.

It's slightly different. If you're in a top-five law school, you generally have your pick of job opportunities. Unfortunately, as I like to say, civil litigation is still civil litigation, no matter who you are doing it for. Some of the comments above about lousy clients still apply to non-profit clients (and very often apply even more!). My sister-in-law is a plaintiffs'-side environmental lawyer from a top-five school -- a job most law students would kill for. She just got burned out on it because it's stupid ol' civil litigation. She probably liked it more than most lawyers do. All that said, I know plenty of lawyers from those schools who love what they do. They are still paying off loans (full-ride doesn't mean as much if you have to pay to live in NYC, Boston, Palo Alto, etc. without pay for three years), but they're relatively happy.

We need lawyers in this country. Smart people should go to good schools and become lawyers. The thing they need to be careful about is thinking that they will love what they're doing because they are going to be (1) "helping people," (2) "changing the world," (3) "making a difference," (4) etc.... Law school is professional school, pure and simple. Going to a really, really good professional school will have its advantages, and I wouldn't try to talk someone out of it. You just can't count on your profession making you happy (whatever "happy" is, anyway), no matter what you're doing.

Good luck!

[john94549]

Boro, it's always been a puzzler. Go to a middling school where one's odds of law review are better, or a top-tier where one faces stiff competition and very real odds of being in the bottom half. The accepted wisdom back in the 70's (my era) was go to the very, very best, then work very, very hard. Not sure what "works" these days.

Once an attorney is four-plus years out, the market shifts. Stuff like "which school", rank-in-class, law review (or not) just aren't as important. When I was a partner in a mid-size firm in SF, laterals were judged on their books (or potential books), experience, and (if cast-offs) why they didn't make the cut elsewhere. All other things equal, law school credentials might come into play, but only if school connections might translate into business.

[countofmc]

I'll just join the chorus in suggesting, no, PLEADING for you not to do this.

Cliche, but if you have the smarts/ work ethic to get into a T-14, there are so many other things you can do with your life that is much better than law.

[MoonOrb]

Hi, read through the posts here, and I have seen similar comments from elsewhere. My question is whether you posters here would maintain similar sentiments if the law school in question is either Yale, Harvard or Columbia (full ride)? Like the OP, my D is also making the transition, from a well paid job (graduated almost two years ago from a LAC) to law school this fall.

Apology for the question in a financial blog. I am a recent lurker learning the Bogleheads way.

My answer would be the same--if you really, really want to go to law school, go. It's just much riskier than it used to be because the amount of debt you take on can be so devastating. Going to a top tier law school obviously gives you access to more job opportunities, but it's also possible to get this access by being a top student at a somewhat lower ranked school. This is especially true if you want to practice in a market that doesn't have a top law school in that city (Pittsburgh, Seattle, Portland, Denver, Phoenix, Tampa, Miami, Atlanta, Memphis, Louisville, Cincinnati, Cleveland, Buffalo, Las Vegas, etc.). Just go to the top law school in that particular city, network like your job depends on it, and work hard on getting top grades.

One of the drawbacks about going to Yale, Harvard, or Columbia is that it might be somewhat harder (counterintuitively) to get a job in the city where you want to live if that city isn't NYC/SF/DC/Boston/Chicago, etc. That's because getting a job depends to a great extent on being very well networked and connected to the community where you'll ultimately practice. The cost of living is also obviously very high in Boston and NYC (not sure about New Haven), so even if your tuition is paid, you'll still be racking up debt. I wouldn't say that these drawbacks outweigh the benefits of going to these particular schools, but they're something to think about. I've never met anyone who says that working for BigLaw is great, but I know many many people (myself included) who enjoy working for what I guess you could call RegionalLaw or MediumLaw--bigger firms that aren't in the biggest cities.

I think this thread reveals that there is a consensus that BigLaw jobs suck. So you don't really want to put yourself in a position where your debt load is so great that you are fighting for one of these coveted high paying jobs that actually sucks. Lesson number one to me is do whatever you can to keep your debt load as low as possible. My feeling is that I would never advise anyone to go to law school if I thought when they got out they would just go straight into BigLaw. There are other options out there, you just have to be smart about how to position yourself to maximize your opportunities to find yourself in a job you actually can enjoy.

[ResNullius]

I think this thread reveals that there is a consensus that BigLaw jobs suck. So you don't really want to put yourself in a position where your debt load is so great that you are fighting for one of these coveted high paying jobs that actually sucks. Lesson number one to me is do whatever you can to keep your debt load as low as possible. My feeling is that I would never advise anyone to go to law school if I thought when they got out they would just go straight into BigLaw. There are other options out there, you just have to be smart about how to position yourself to maximize your opportunities to find yourself in a job you actually can enjoy.
=================
As I posted earlier, I was one of those impossible to satisfy senior partners in a large law firm. I'll echo firmly what others have said, Big Law sucks big time for associates. First, very few top law grads even can get a Big Law slot in today's market. Second, if they do get one, they almost certainly will do mindless and worthless work until they are discharged after about 4 years. Third, if they aren't discharged after 4 years, then they will continue to do mindless and worthless work for many more years. Fourth, only a small fraction of the law grads that start in Big Law make it to partner, while the rest get tossed to the side without having gained any real experience in being a real lawyer in the real world. It didn't use to be this way, but the legal world has truly changed for the worse. Also, graduating from a top tier law school doesn't guarantee anything. Beware.

[2stepsbehind]

Hi, read through the posts here, and I have seen similar comments from elsewhere. My question is whether you posters here would maintain similar sentiments if the law school in question is either Yale, Harvard or Columbia (full ride)? Like the OP, my D is also making the transition, from a well paid job (graduated almost two years ago from a LAC) to law school this fall.

Apology for the question in a financial blog. I am a recent lurker learning the Bogleheads way.

I went to one of the one of the schools you've mentioned and I'd ask the same questions. What is the motivation for going to law school? How much debt is the student going to rack up? How high is the person's tolerance for tedium? Because as much as people like the OP or your D think it can't be as bad as people are saying, it really can.

If someone gets a Hamilton Scholarship from Columbia and their whole life they've dreamed of following in the footsteps of their father, who is a partner at Sullivan & Cromwell, then I'd say have at it! If someone got into Yale, got a decent amount of grants, and their whole life they've dreamed of following in the footsteps on their mother and becoming a law professor, again, I say have at it! If someone got into Harvard, has a bunch of family money, and is hoping to be the next Mitt Romney, again have at it, but I wouldn't say that attending any of these schools is the wise decision for the vast majority.

That said, I think matjen and ResNullius overstate the difficulty of getting a biglaw job. I'd agree with TSR that depending on where one lands in the T-14 the odds can be quite good.

[aude]

I have to interject here as a partner at a mid-sized, well, fairly big, firm. Unlike most of the posters, my work is 100% transactional, not litigation, and I actually really like it after 10+ years. Getting a nice merit scholarship helped with the law school debt part.

You may want to consider the transactional route to avoid burnout. People on both sides of the deal have the same goals (roughly) in mind, and the yelling and screaming is truly a once-a-year exceptional sort of thing. You also have plenty of in-house options if law firm life is not for you. On the minus side, law school does a miserable job of preparing you, since it is so litigation-heavy, so there are a few years of on the job training that would be unthinkable in other professions like medicine.

Over the years, you need to develop your own clients. That way, instead of being dependent on others for work, you will be fairly self-sufficient and control your schedule (subject to client demands, obviously). That is the key to success in this profession/business. In my case, it also gives me the freedom to go to another firm if I so desire rather thay stay somewhere insufferable.

Start with biglaw if you want the big bucks and training, and then consider downshifting a bit.

Like any other line of work, you are largely in control of your long-term career satisfaction. Good luck!

[2stepsbehind]

I have to interject here as a partner at a mid-sized, well, fairly big, firm. Unlike most of the posters, my work is 100% transactional, not litigation, and I actually really like it after 10+ years. Getting a nice merit scholarship helped with the law school debt part.

You may want to consider the transactional route to avoid burnout. People on both sides of the deal have the same goals (roughly) in mind, and the yelling and screaming is truly a once-a-year exceptional sort of thing. You also have plenty of in-house options if law firm life is not for you. On the minus side, law school does a miserable job of preparing you, since it is so litigation-heavy, so there are a few years of on the job training that would be unthinkable in other professions like medicine.

Over the years, you need to develop your own clients. That way, instead of being dependent on others for work, you will be fairly self-sufficient and control your schedule (subject to client demands, obviously). That is the key to success in this profession/business. In my case, it also gives me the freedom to go to another firm if I so desire rather thay stay somewhere insufferable.

Start with biglaw if you want the big bucks and training, and then consider downshifting a bit.

Like any other line of work, you are largely in control of your long-term career satisfaction. Good luck!

I'm not sure if there is any appreciable difference between the dissatisfaction of transactional v. litigation for biglaw associates, but if there is one, I bet transactional associates hate their job more than litigation associates. In theory, litigation associates are working against a calendar--yes, it might not be their own, but they know they can schedule their vacation after the next brief is filed. In my experience, especially for something like M&A you are always at the mercy of the client. You work yourself up to a frenzy because just before IBanker Fred leaves for his weekend in the Hamptons he calls the office indicating he'd like to be advised on X by Monday morning. Clients call and say they'd like a deal to go through ASAP--you work for days and they can't close. You try to explain what you do at a cocktail party and you can see them politely trying to suppress their yawns.

[aude]

2stepsbehind is right in the early years of biglaw M&A (I remember it well) but less so if (a) you are in a mid-sized firm and/or (b) become more senior and things roll downhill past you pretty easily. The cocktail party thing is a cinch. Don't talk about contracts, talk about the zaniest deals you've worked on and people actually like it.

[MBMiner]

After reading all this it confirmed my decision many years ago to enter the trust banking field as a lawyer. Most of my classmates at one of the top law schools aspired to join Biglaw in NYC (the term didn't exist in the '60's). In spite of being admitted in New York, I opted to enter the trust field and retired as a senior executive of a Wall Street bank with offices in Florida where I worked. I've never regretted the decision.
Bruce

[boro]

Thank you for taking the time to respond. I hope that I would one day gather enough wits together to ask you folks for portfolio help but in the meantime, I would just be content practicing the frugal Bogleheads ways so that I can happily help pay my D's law school. Thanks again.

[ossipago]

I can't recall the date I passed the bar. I will never forget the date I retired: November 9, 2006.

FWIW, I did it all. Big law, mid-size, associate, shareholder (aka partner), solo (at the end).

Best advice I can give: ditch BigLaw aspirations initially. Get involved politically and snag a job interning in the DA/PD office. Hope to get hired by either on graduation/passing bar, as it will be your only real chance to gain marketable skills, i.e., trial work. Kids two years out of law school are expected to try misdemeanors, but combat is better than carrying someone's briefcase. Four years out, you will be marketable, unlike your peers in BigLaw.

As I recall, BigLaw cuts come initially at two and four (i.e., half the associates are eliminated at the end of their second year, and another half at the end of four years). A class of 20 would have five left, of which two would be partner-track. Those two would generally be one corporate, one litigation. Does it still work that way?

I believe the percentage of associates that make it to equity partnerships is much lower than 10% these days - closer to 1%.

[Super Hans]

Let me join the chorus of naysayers. I'm a lawyer for the federal government and I actually like my job. From a financial perspective, though, my pathway was foolish. I went to a top school, clerked for an appellate judge, and put in some years at one of the best New York City firms. Needless to say, I hated BIGLAW. I took a ~60% salary cut to accept my position in Washington. The highest non-executive pay is $155k p.a. (with the exception of some non-appropriated agencies), which doesn't afford a champagne and caviar existence in metro Washington. It's not necessary to go to law school (or really any school) or do legal work to end up at the top of the federal pay scale. And yet there are lots of unemployed lawyers making nothing.

[LadyGeek]

Thank you for taking the time to respond. I hope that I would one day gather enough wits together to ask you folks for portfolio help but in the meantime, I would just be content practicing the frugal Bogleheads ways so that I can happily help pay my D's law school. Thanks again.

Unfortunately, the OP did not get the answers to his portfolio questions, as we seem to have hit a sensitive nerve regarding law as a career choice. To give everyone time to calm down, this thread is locked.

OP - You may start a new thread, or, PM me to reopen this one.

[LadyGeek]

After a cooling off period, the OP has requested the thread to be reopened. Please try to help with these questions:

Questions

1. Once I quit, what should I do with the 401k? I will most likely have no income for all of 2014, so I believe it would make sense to convert it to a ROTH IRA next year, but I don't know how the process works and what I need to do in the meantime to just roll-over to a Traditional IRA. What steps do I need to take to get my money from my employer's 401k over to Vanguard and minimize any tax implications?
2. Keeping in mind that I need to have access to cash, should I still take some of my money and fill up the ROTH IRA to the limit for this year? I know I can take contributions out later, but psychologically I've always had the mindset of "once it goes into a retirement account, it's not coming out." On the other hand, seems to make more sense to put it in the ROTH than to keep it in AmEx where it's making almost no interest. If for some reason the funds lost value, wouldn't be the end of the world.
3. What should my asset allocation be while I'm in law school? I'm thinking I feel comfortable with 70/30 split, and once I can have it all in Vanguard that'll probably be easier to manage.
4. Anything to keep in mind when I give notice and eventually quit? Should I look-out for any forms they'll want me to sign or be wary of anything?

Thanks in advance for all your help!

[Rammer]

Sounds like you can use your response of question 2 to answer question 1. Once it's in retirement, keep it in retirement. Leave your 401k alone.

However, in a situation such as the one you'll be entering, a Roth IRA would be great to contribute to, knowing you could use it as an emergency fund if needed. If not needed, it's still growing for retirement.

I personally don't think your asset allocation should change just based on your cashflow at the time, especially in your 401k. The IRA might be a little different if you plan on using it for an emergency fund. Maybe keep at least 6 months of expenses within your IRA in bonds and invest into your AA from that beginning balance.

[m458]

Hello, again! Appreciate everyone's comments. I can already say that I've decided to stick with my job until just a few weeks before school starts to help get more income and reduce the cost/debt burden of school, so thank you for that.

First of all, let me just say that I'm aware of all the anti-law sentiment. I've read a lot online (from the "scam" blogs like Insidethelawschoolscam and Above The Law to other message boards and countless articles about the state of the legal field and law school as well) and have not made this decision rashly. Let me try and tackle a couple of the points I've seen discussed:

Debt

I think a huge cause of the problems a lot of starting lawyers face are due to debt. Debt causes people to make job and career choices they would not otherwise make as they are forced to take the job that allows them to service that debt. I certainly agree that I'd be miserable if I ended up at a job I hated *and could not leave for 5 years*. However, that's not the case in my situation. AT MOST, I will be $50,000 in debt when I graduate law school, and this will be money owed to parents at a 0% rate that I know they will not pressure me to pay (my goal is to pay it off as quickly as possible and with interest as well, but certainly that depends on what kind of job I get coming out). If things work out as planned, that number will probably be closer to $25,000 due to income from working both summers (again, larger chunk of that coming from 2nd summer).

I know that BigLaw or a job that pays "well" is not a guarantee by any stretch, but I do feel comfortable that the school I'm attending will give me a good shot at it. I've added the % of grads going to Federal clerkships, firms of 100 or more, and public interest, and it's around 65%. Another 5-8% or so end up working in business (the school has a top JD/MBA program, so these are also "desirable jobs"), a smaller chunk at small firms or government, and certainly 20% or so end up underemployed, employed in a field where their JD is of little/no value, or strictly unemployed. I think--from a purely economic standpoint, as I don't want to get quite into the qualitative aspects of a legal career just yet--this is not an outrageous risk to take. Essentially, better than a 2/3rds shot at getting a job worth going into this debt for. I certainly would not go if I were looking at $100k or even up to $200k in debt as I don't believe anyone should be shackled that way.

The big benefit of not having all this debt is that if I do at some point find that I can't stand Big Law or even law in general, I can transition out of that path and not worry about loan payments hanging over my head. However, I don't think I'll regret entering the legal profession...

Law as a career for me

In my current job and internships through college, I've been exposed to a couple acquisitions with the corresponding due diligence that has taken place as well as licensing/copyright agreements and suits in other instances. I also took an undergrad law class and later a class directly in the law school of the university I was in which I really enjoyed. I know it's tedious to look at hundreds and hundreds of pages of legal documents, but I actually do find it interesting to see how it all comes together on a deal or on a practical matter (even if I don't have as much exposure to the finished product as I'd like). I like doing research/writing and negotiating terms and as far as I understand it (please correct me if I'm wildly off here), a good chunk of legal work once you gain experience and pay your dues is just that. Ultimately, my dream job would be to move in-house to a sports franchise/league and work on media agreements, labor agreements, etc. I know these jobs are rare and unlikely, and that's why I'd also be happy moving in-house to any large company and working on IP, labor-related issues, or hell, any other practice area that I find I enjoy (surprisingly, to echo what someone said earlier, I've heard tax can be incredibly interesting--not sure I believe it just yet!).

Fortunately, the school I'm going to is known for being practical and providing a lot of opportunities for real experience. Between the clinics they offer and being in a major market, I feel like I'll have the opportunity to gain exposure to different types of law and see what fits for me. I am hoping to also have the option of doing externships which hopefully give me a better look into the non-big law fields of law.

I also have spoken to lawyers in large law firms, in-house at companies, and also in public interest/government work. There are certainly happy lawyers, but it is certainly true that almost none were thrilled with biglaw. The people I have spoken with do emphasize the exit opportunities that come from working at a large law firm. From what I've heard, it is around year 3 or 4 that opportunities begin to become appealing. Certainly there are opportunities before then and after, but that 3rd/4th year seems to be the sweet spot of when there's an exodus of associates leaving big law because they can't stand it anymore and are willing to take a paycut to have more reasonable hours and a better lifestyle. These exit opportunities are the reason why I'm going to law school.

Back to the questions I had!
1. Since next year I will have little or no income, I understand that it'd be wise to convert things to a Roth IRA at that point. Right now I have my 401k which I'll be rolling over to a Traditional IRA with Vanguard in July/August when I quit. What steps do I take this year and then next year to have all my money end up in a Roth and pay the least amount of taxes?
2. Is it better to put $3,500 into the Roth this year, or keep that money liquid and in the end borrow $3,500 less from my parents?
3. 70/30 asset allocation sound about right for me? I intend to stick with this allocation not just while I'm in school, but afterwards as well. Hoping to be able to have it all in one place, in a Roth or tax-deffered, and in an "all-in-one" index fund.

Again, thanks. I'll keep reading and analyzing all your advice.

[BolderBoy]

1. Since next year I will have little or no income, I understand that it'd be wise to convert things to a Roth IRA at that point. Right now I have my 401k which I'll be rolling over to a Traditional IRA with Vanguard in July/August when I quit. What steps do I take this year and then next year to have all my money end up in a Roth and pay the least amount of taxes?

I don't know how Illinois does its income taxes or where you will be next year, but you'll have a standard deduction + personal exemption against which you can squash some Roth conversion (federal) taxes from the tIRA (after you've done the 401k rollover. Does that make sense?

[caroljm36]

[OT/personal remarks removed by admin alex]

[2stepsbehind]

Thanks for the additional color, OP. It certainly sounds like you've given this some thought and I doubt anything I say will change your mind. That said, I'd caution you and anyone else that might be considering law school that the "exit opportunities" are getting few and far between. There are many associates who are stuck in biglaw not because of debt, but because of the lack of viable alternatives. And be wary about those employment figures. Schools are not above funding certain "9 month public interest positions" to gerrymander their employment figures. The fact that the school has reported that 20% or so of their students (all of whom were likely in the top 5-10% of their undergrads) end up underemployed, employed in a field where their JD is of little/no value, or strictly unemployed would give me the willies, but each person has their own risk tolerance. I wish you all the best.

On your additional questions:
1. The biggest thing is contribute as much as feels comfortable to the 401k or roth. If your parents can easily afford to front you the money, consider maxing both accounts ($17,500; $5,500). Otherwise I wouldn't worry too much about complicated schemes. You probably won't make any money your first summer. Paying gigs are few and far between.

2. See above; it depends on your parents' finances/willingness to subsidize you. If they can easily afford it and they'd be happy to do so, why not? In fact, if that is the case, why not go for the full $5500?

3. It sounds fine, but so would 90-10, 80-20 or 60-40 etc. At this point allocation matters much less than the amount of contributions.

Final thoughts: I hope you understand that the vast majority of comments in this thread are just geared towards making you, and anyone else who might be lurking, understand the larger financial impact of the decision to attend law school. The equivalent would be someone asking the board to review the particular fund proposed by financial adviser, noting as an aside that the adviser charges a 50k load. In both cases the actual fund or allocation likely pales in importance when considering the impact of the load/debt.

[campy2010]

I agree to leave your 401k alone if you have access to a 0% loan from family. EXCEPT, that I would use your 2L year to roll over your 401k to a Roth IRA since your income will likely be at an all-time low that year. Good Luck.